Taxes outlined by school board
by Nancy Haigh
Fact finding questions to empassioned speeches were heard at an informational meeting regarding taxes and a new school facility in Philip, Monday evening.
A little over 100 people attended the meeting which the Haakon School District Board of Education held to present tax information and how it would fund a new facility and where and when to vote for the bond election.
Board member Doug Thorson recapped how the board came to the decision to erect a new facility. He noted the board did not start out to seek a new facility. The beginning was when the Department of Environment and Natural Resources informed the board that the treatment pond would have to be updated or shut down. Before moving forward on the pond issue, they decided to investigate the well as it had already exceeded its life expectancy.
The geothermal pond is being brought up to code, requiring about $750,000 to do so.
The well checked out to be in better shape than expected, but still required a large influx of dollars to reline and update other pieces. Since the plumbing for the heating in the existing buildings is failing, the board hired a company to go through and look at the heating system. The company informed the board it would cost $1.3 million to replace the heating system. Thorson added the board knew the other plumbing and electricity were in need of updating as well. An estimated $5.2 million would cover all three of those updates.
He stated that with that amount of money involved, the board decided to look at a new facility.
Toby Morris, Pierre, Dougherty & Company LLC, stepped up to speak about the financial aspect of a new facility.
He brought the patrons up to speed regarding how the past legislative session changed capital outlay funding.
Capital outlay funding is now based on a per student amount of $2,800. The mill levy no longer exists. Morris stated this formula for small rural schools of 400 and under has wreaked havoc.
Morris said this was brought about because some schools were leaving the mill levy at $3/$1,000 valuation and amassing huge funds. Some school districts, he said, were seeing 15 percent increases in taxes in a year. Schools like Haakon County, who were being good stewards and taxing only what they needed, are now handicapped.
To finance a new facility, instead of increasing the capital mill levy as originally planned, the board has to seek general obligation bonds, which have to be approved by 60 percent of voters who vote on election day.
Billie Parsons, Milesville, asked Morris what the interest would be on the $9 million in bonds. Morris noted that the most recent amount was 2.55 percent for a Redfield facility project. He has figured in 3.5 to 4 percent, the worse case scenario, for Haakon School District.
Currently, the average the school district spends on capital outlay purchases is $340,000. Another $625,000 is needed to pay for a new facility each year, for a total yearly capital outlay tax impact of $965,000.
On the plus side in mill levy terms, this is less than the full $3/$1,000 mill levy amount. The $340,000 equals a mill levy of 80 cents. The $625,000 equals $1.47, for a total mill levy amount of $2.27/$1,000.
Business Manager Britni Ross explained that the $340,000 in capital outlay funds are used to purchase textbooks, busses, vehicles, computers, barium chloride, etc.
The Haakon School District’s general fund operates yearly on $2.4 million. Ross stated the general fund levy is at the $3/$1,000 mill levy. She noted that 85 percent of the general fund money is used to pay salaries. Because of that, she believes that mill levy will never decrease.
Ross noted the former pension fund that the school once levied for, was pulled during this past spring’s legislative session. The state pulled away the 30 cent levy and put back 23 cents into the general fund. The school also has a special education fund levy. Ross noted that levy is the most fluid levy, as each year’s needs vary, sometimes by a large amount. She said she has a proposed decrease of 50 cents for the next year.
Larry Gabriel noted he wasn’t against a new facility, but he was concerned with having a bond for 20 years, as that is a long time to predict the future. He gave the current board a vote of confidence, but was concerned with what future boards may do. He noted that currently ag values are in a downward turn and are projected to continue as such.
Parsons questioned if more maintenance could be done in replacing/repairing issues to gain more life out of the current buildings, plumbing, etc.
Superintendent Kevin Morehart answered that in about his third year in Philip, they had a quote of $50,000-$60,000 just for elementary building plumbing. He added all the pipes are in the wall, so it is hard to know just how bad it really is.
Morehart added that you can’t look into the future, the kids deserve new buildings. He also has heard talk about co-oping with Wall, but who is going to drive 90 miles one way to school?
Don Burns asked how much money had been put into capital outlay this year for the $3 mill levy. It was noted that about $450,000, for the first half of taxes. Burns also outlined how the geothermal district came into being for the businesses downtown and the agreement for them to pay half of the barium chloride costs.
Ross stated for the election residents must be registered as voters by Aug. 8. The Aug. 23 election is in room A-1, the library, from 7:00 a.m.-7:00 p.m. Absentee ballots may be cast between Aug. 8 and 5:00 p.m. Aug. 22. For further details regarding absentee voting, Ross may be reached at the school during business hours at 859-2679.
Parsons noted that he is not opposed to the school and its education. He noted that the quality of education in Haakon County is outstanding. And the number of scholarships and the $1.2 million that is given out for them each year, is tremendous.