Public told district seeking to extend bond issues at meeting

By Staff, 04/5/17 10:26 AM

PRESCOTT – A special election will be held on May 9 with the Prescott School District asking patrons to allow it to extend its bonded indebtedness to complete a series of projects needing to be done.

A public meeting was held on the topic Tuesday evening at the Prescott High School Auditorium. The projects, as described by Superintendent Robert Poole, include a new roof for PHS, more cameras around the school and new seating for the auditorium, along with having air conditioning installed in the Prescott Sports Complex. These projects will cost an estimated $805,000. The district, he told an audience of about 50, is holding the special election to get permission to extend the district’s indebtedness and, thereby, raise the necessary funds.

John Brannon, president of the Bank of Prescott, said he looked at the proposal for the bond extension and found it would cost the district $3.5 million more to do this than to seek a 2 mill increase. The 2 mill, it was explained, would increase the property tax on a $100,000 home by $40 a year.

The bonds, he said, the district has won’t mature for 20 years and if the bond issue passes, it will be 30 years before they mature. A millage increase, he told the audience, could be paid off in five or 10 years. “I don’t oppose improvements in the district, but I wonder if this is the smartest way. We have two good bond issues with a 2.65 percent blended interest and if we pass a small millage we’ll still be below the state average.” Prescott’s current millage rate is 35 mill. Brannon said one or two mill would take care of these projects.

He continued saying A.V. Beardsley, with First Security, would say a millage issue wouldn’t pass, but extending the bonded indebtedness would.

Schools, Poole said in response, operate on debt. This is how districts generate money, along with student population. He reminded those gathered the millage rate is based on the assessed value of property, and that’s against the district as this is a poor community.

Brannon said once the debt is paid off the millage could also be removed. That said, he left the meeting.

Beardsley told the audience the Prescott School Board voted to try and extend the district’s indebtedness because people in the district would rather pay longer than pay a millage increase. He agreed extending the debt is not the most economical way to do things, but it is what those board members talked to preferred. The district, he continued, can’t finance the amount needed for these projects and doesn’t have the money for them either. The agreed a 2 mill increase would generate the same amount of money as extending the debt and the district would have the same cash flow. However, he added, it would take 20 years to generate this amount where extending the debt gives the district the money sooner.

Bob Cummings said the county voted a 1.5 percent sales tax, and had the largest win in Arkansas history. This was for the construction, operation and maintenance of the new Nevada County Jail. He said the district needs to be sure it’s doing things the right way the first time.

Poole reminded those present, not everyone in the county will be voting on this. The vote will be for district patrons only. He pointed out the district is only extending its indebtedness for 10 more years, not 30, as the existing bonds still have 20 years before they’re paid off. He also said the district will never have its bonds paid off, as there will be projects requiring funds the district won’t have and will require more bond extensions. This, he said again, is how schools do business.

Kathy Janes, assistant principal at Prescott Elementary School, reminded the audience people are struggling to make ends meet in the district and, while $40 a year may not seem like much, it’s an additional burden on their already strained finances. She pointed out there are students whose only meals are those they get at school with the breakfast, lunch and after school programs because their families are impoverished. There are those, she added, who are working two and three jobs just to try and get by and can’t afford higher property taxes, nor can those who are retired and living on a fixed income. She invited everyone to attend school board meetings and see how the board struggles with such decisions as these. “This is the best of the two options,” she said. “This is a poor community. You need to support the board.”

Though the discussion was about two options, only one was being considered by the board and it had nothing to do with a millage increase.

Poole told the audience the state will be paying 65 percent of the cost of a new roof for PHS, but the district will have to fund the rest, or $340,000, and the district will have to foot the bill for the rest of the projects itself.

He said the district has a major project it’s seeking as part of its facilities plan and is only waiting for the state’s approval before moving forward on it. The plan is to build a new elementary school. If approved by the Arkansas Department of Education, the state will pay 65 percent of the cost of construction for a new, state-of-the-art elementary school, leaving the district to pay 35 percent, and a deadline on when construction needs to begin. This, he said, will require the passage of a millage increase.

District patrons, he said, won’t pass a millage now and another one two or three years down the road. If that millage fails, he added, the district will be responsible for 100 percent of the cost, and could wind up in financial distress resulting in it being taken over by the state. The same holds true for the roof project.

The audience was reminded it’s been almost 20 years since a millage increase was approved by voters, and that was for the new gym.

The project costs break down as follows: air conditioning for the gym, $240,000; new seating for the auditorium, $125,000; cameras district wide, $100,000; and a new roof for PHS, $340,000. Throughout the meeting, Poole stressed not one penny of this money will be used to install Astroturf on Eddie Jackson Field, in spite of the rumors going around. “We have a great football surface.” He reminded the audience Prescott was the only team in the semifinals playing on natural grass and not turf, and brought home the state title.