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Perkins Schools to seek construction levy

Susan McMillan • Jul 15, 2010 at 2:14 PM


The Perkins Schools Board of Education chose the smallest of four millage options for a November levy to fund construction of a new K-12 campus.

The district will ask for approval of a 4.98 mill emergency levy, which would raise $2.25 million per year for the general fund.

By moving millage for different purposes, school leaders hope to take better advantage of growth in the community to pay back as much as $100 million in subsidized and low-interest federal construction bonds during the next 30 years.

In the meantime, the new levy would increase taxes on a $100,000 home by $152.51 per year, and less for senior citizens.

Board members considered levy options ranging from 4.98 mills to 5.98 mills.

"Any one of these four amounts, five years from now we will have a carryover fund balance," superintendent Jim Gunner told them. "The question is how much, and how much more, in year five, will we be spending than we're bringing in?"

Board vice president Steve Schuster wanted a levy of 5.2 mills because school leaders plan to move 5.2 mills of inside millage from general operations to permanent improvements if voters approve the levy. It would make it easier to explain the complicated millage swap, he said.

But the other board members favored the smaller levy for the purposes of marketing and sparing the taxpayers some expense.

"If we can get by with the lowest millage we can get for the voters, that's fine," board president Brian Printy said. "As long as it's not handcuffing us, and you're saying it won't handcuff us."

Gunner said the difference between 4.98 mills and 5.2 mills amounts to about $90,000 per year.

With the smaller levy, the district would carry over about a $3.5 million balance five years from now. This year's carryover balance was $6.3 million.

The board also heard a presentation from Patrick King of investment banking firm Stifel Nicolaus and Co., the district's bond counsel.

King and his associates built a model that takes projected interest rates and projected growth in property valuations to estimate how much Perkins Schools can afford to borrow in federal construction bonds.

Based on average growth in the last 20 years, the district could borrow $100 million with a 30-year payback.

But property values have risen more slowly in recent years, so board members also looked at more conservative projections that would provide for paying back about $68 million.

At zero growth, King said, the district could afford to borrow $46 million.

King said these are the lowest interest rates he's ever seen.

"It's a combination of just generally low interest rates and the bond programs," he said. "It really is just a historical time."

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