Perkins schools look for livable levy strategy

By SUSAN MCMILLAN

mcmillan@sanduskyregister.com

PERKINS TWP.

Although Perkins Schools' finances look good for the near term, voters can expect to see a levy on the ballot in November as the district prepares to overhaul its facilities.

The levy, however, won't be the traditional construction bond issue. School officials want to try an unusual way to raise money for construction, maintain a healthy general fund balance and retire a permanent improvement levy all at the same time.

It will cost tens of millions of dollars to redo the stadium and build three schools and a community arts and recreation center.

The architecture firm guiding the planning process drafted a $102 million wish list based on community input.

Even a more modest project of perhaps $70 million would make a bond issue prohibitive, superintendent Jim Gunner said.

"The millage would be way too high, and we don't think it's something the community could afford," he said.

The district would also need a new operating levy in a few years, plus several renewals of various levies in the next decade, all while residents are still paying the bond levy.

Gunner and the school board hope to avoid voter fatigue by shifting millage among funds and winning approval of an operating levy in November.

The whole plan rests on that levy.

Perkins has to go for the operating levy to take advantage of Qualified School Construction Bonds and Build America Bonds, federal programs that run out this year and are unlikely to be renewed if the economy continues to improve.

If the district can borrow through those low-interest programs, Gunner said, it could save many millions of dollars in interest.

The school board has not decided on the amount or type of levy to seek in November.

School officials are looking at two unusual options, both of which would allow the district to avoid the restrictions of House Bill 920. That 1976 law limits the amount of money a voted property tax can raise, with effective millage lowered to balance rising real estate values.

One option is a 10-year incremental amount levy, which gets bumped up by a specified amount -- for example, 10 percent or $200,000 -- each year.

The other option is to seek an emergency levy now and then ask voters to renew it as a substitute levy in a few years. A substitute levy maintains its millage, allowing the school district to benefit from growth in the community, but it cannot be placed directly on the ballot. Voters must approve converting an existing emergency levy.

Incremental levies have been around since 1990 but are infrequently used, according to Ohio Department of Taxation spokesman John Kohlstrand. Two districts put new ones in place for the 2009 tax year.

Six school districts had substitute levies in place for the 2009 tax year, the first year they could be used.

If Perkins Schools voters approve the levy, Gunner said the board would immediately move to apply for the federal bonds and shift the district's 5.2 mills of "inside millage" from the general fund to the permanent improvement fund. The new operating levy would make up for the loss of money to the general fund.

Inside millage is unvoted and provided to local entities by the Ohio constitution. It is not subject to the restrictions of House Bill 920, so the $2.6 million it now generates each year would continue to rise with valuations.

"For us it makes a lot of sense because we anticipate a lot of growth," Gunner said. "(U.S.) 250 is going to develop at some point, whether it's tied to NASA or not."

Perkins would repay its construction bonds from the permanent improvement fund. Depending on how fast it grows, the board could allow the existing 2-mill permanent improvement levy to expire in 2012 or renew it one more time.

Gunner's last school district, Bryan City Schools, accomplished something similar in 2003, shifting their inside millage to permanent improvements to save up for construction. But it took two tries to win a 1 percent income tax to stabilize the general fund.

"The problem we have here is we really have only one attempt at this in November," he said.