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HomeMy WebLinkAbout2017_07_25 Board Minutes IDAHO FALLS SCHOOL DISTRICT NO. 91 BOARD OF TRUSTEES -- WORK SESSION TUESDAY, JULY 25, 2017 7:00 P.M. IDAHO FALLS HIGH SCHOOL – ROOM 121 601 SOUTH HOLMES AVE, IDAHO FALLS Present from the Board: Present from the Administration: Trustee Lisa Burtenshaw, Chair Superintendent George Boland Trustee Dave Lent Sarah Sanders, Director of Secondary Education Trustee Deidre Warden, Clerk Margaret Wimborne, Director of Trustee Larry Haws, Vice Chair Communications and Community Engagement Trustee Larry S. Wilson, Treasurer Debbie Wilkie, Board Secretary, Recording Others Present: Eric Heringer, Financial Advisor, Piper Jaffray Mike Clements, CMGC, Bateman-Hall Aaron Jarnagin, Principal, Skyline High School Bob Devine, Principal, Idaho Falls High School Chairman Burtenshaw called the meeting to order at 7:04 p.m. and requested a motion to amend the agenda. Trustee Warden made a motion to amend the agenda to include Action Item c. Student Travel Request – Idaho Falls High School. Trustee Haws provided the second. Motion carried 5 ayes, 0 nays. Trustee Warden made a motion to adopt the agenda as amended. Trustee Wilson provided the second. Motion carried 5 ayes, 0 nays. Chairman Burtenshaw then called for a motion to go into Executive Session. Trustee Warden made a motion to convene in Executive Session pursuant to Idaho Code, Section 74-206 (1) (c) Property. Trustee Lent provided the second. A roll call vote was taken: Lisa Burtenshaw – yes Dave Lent – yes Deidre Warden – yes Larry Haws – yes Larry Wilson – yes EXECUTIVE SESSION Superintendent Boland and the Board of Trustees met in Executive Session regarding property acquisition. Trustee Lent made a motion to return to Open Session at 7:12 PM. Trustee Haws provided the second. Motion carried 5 ayes, 0 nays. 07/25/2017 D91 Board Minutes Page 1 of 3 WORK SESSION a. High School ReDesign Project and Bond Discussion Superintendent Boland reviewed that the Board has spent the past 18 months working on the high school redesign options and financial scenarios, landing on redesign of Skyline High School and a rebuild of Idaho Falls High School. Supt. Boland stated that after reviewing the numbers it looks like the district would be able to bond for $110 million needed to complete the projects without a tax rate increase. Superintendent Boland introduced financial advisor Eric Heringer to review the final analysis. Eric stated the current interest rate for a triple A, 20- year municipal bond is 2.6%, historically the average has been 3.4% so that is encouraging. Eric reviewed market value history, compound growth rates over the past 20 years, bond sell options and repayment schedules. Based on the growth the area is seeing, the assumption is the district would be able to bond $110 million without a tax rate increase. A discussion was held regarding the commitment of no tax rate increase, the risks, available options if the growth assumptions don’t come in as projected, contingencies, bonding capacity, bond redemption fund and reserves on hand to help manage anything different. Superintendent Boland reviewed that the Board had previously discussed specifics of the design and cost for the projects. ACTION ITEMS a. Bond Resolution Superintendent Boland stated the bond resolution, prepared by Nick Miller at Hawley Troxell, contains the required pieces; how much - $110 million, where – various polling places within the district and when – November 7, 2017 election. It is the recommendation of the administration to approve the bond resolution as presented. A discussion was held regarding the district’s total debt capacity, which is currently 210 million based on market values from January 2016. Trustee Warden made a motion to go forward with the bond resolution as presented. Trustee Wilson provided the second. No further discussion. Motion carried 5 ayes, 0 nays. b. Property Purchase Option Agreement Superintendent Boland reviewed this agreement is for the option to purchase 58.15 acres, east of Holmes th Avenue off 49 South on the north side of the road. The agreement between GHG Investment Company and Idaho Falls School District #91 gives the district the option to purchase the property for $1,453,750.00, subsequent to the successful passage of the bond. Superintendent Boland stated should the district choose to exercise the option this would be the site on which the new Idaho Falls High School would be built. The cost of the purchase option agreement is $3000.00 which would go towards the purchase price if the November 7, 2017 bond election is successful. Trustee Lent made a motion to enter into this Purchase Option Agreement as stated, to authorize the payment of $3000.00 as identified, and to authorize the superintendent to execute the purchase option agreement on behalf of the Board of Trustees. Trustee Haws provided the second. No further discussion. Motion carried 5 ayes. 0 nays. c. Student Travel Request – Idaho Falls High School Superintendent Boland stated the IFHS Cross Country Team received an invitation to participate in the Nike Portland Cross Country Championship after they had previously requested to participate in the Missoula Cross Country Championship, they would like to attend in the Portland event instead. A discussion was held. 07/25/2017 D91 Board Minutes Page 2 of 3 Trustee Wilson made a motion to approve the travel request from the Idaho Falls High School Cross Country as presented. Trustee Warden provided the second. Motion carried 5 ayes, 0 nays. Chairman Burtenshaw stated the next regularly scheduled meeting will be held on Wednesday, August 16, 2017 at 7:00 p.m. in the District Office board room. Trustee Warden made a motion to adjourn. Trustee Lent provided the second. The meeting adjourned at 7:52 PM. 07/25/2017 D91 Board Minutes Page 3 of 3 High5.55% Low1.81% Average3.40% Current2.64% 1 The District’s most recent 20-year compound growth rate is 4.29%. Fiscal YearNet Taxable Value% Growth 2017 3,256,273,797 3.94% 2016 3,132,735,306 1.25% 3,094,028,405 1.41% 2015 3,050,873,506 1.00% 2014 20133,020,675,054 -1.08% 20123,053,506,232 -0.63% 20113,072,885,829 -1.79% 20103,128,982,810 4.72% 20092,987,990,984 11.25% 20082,685,722,149 11.83% 20072,401,697,364 3.09% 20062,329,809,227 Idaho Falls School District No. 91 Net Taxable Value 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000,000 500,000,000 0 200620072008200920102011201220132014201520162017 2 Goal of Analysis: Review projected bond repayment costs of $110 million bond proposal for a November 2017 election. Structure bond sale to fit within District’s current total tax rate structure of $4.24 /$1,000, without a tax increase. Planning Assumptions: Existing Supplemental M&O Levy is continued at $6.8 million for the foreseeable future. $190K annually transferred to the bond fund from personal property tax replacement funds provided by the state. Existing Plant Levy is continued at $2.4 million for the foreseeable future. $110 million bond authorization split into two bond sales: $55 million sold in Spring 2018 $55 million sold in 2019 Existing and proposed bonds qualify for bond levy equalization subsidy at 9% of average annual bond payment. Interest rates are as of July 17, 2017 plus 0.50% cushion for 2018 sale and 0.75% cushion for 2019 sale. 3 Levy Rate Modeling Election Disclosure (Includes Interest Rate Cushion)(No Cushion) Sale 1 (2018)$55,000,000 $55,000,000 Sale 2 (2019)$55,000,000 $55,000,000 Total$110,000,000 $110,000,000 Plus Interest Cost$59,724,125 $49,636,125 Total$169,724,125 $159,636,125 Less Proj. Levy Equalization (@ 9.0% of P&I)($15,275,171)($14,367,257) Net Total$154,448,954 $145,268,868 (1) Combined TIC3.76% 3.27% Projected Growth 20186.00% 2019-20205.00% 2021-20292.50% 2030 and after0.00% Tax ImpactNo Increase (1) Sale 1 interest rates plus 0.50% cushion, Sale 2 interest rates plus 0.75% cushion. 4 Tax Levy and Revenue Projections $110M Bond Authorization (Split Sales) 30,000,000 PlantSupplementalExisting Debt(1)$55M Sale 1(2)$55M Sale 2(2)Tax Revenue at 4.24/$1,000(3) 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 20172018201920202021202220232024202520262027202820292030203120322033203420352036203720382039 (1)Includes District’s outstanding 2012A, 21012B, and 2012C Bonds net of expected levy equalization. (2)Projected debt service for $110M bond proposal split into two sales (2018 & 2019). (3)Projected tax revenue based on the District’s current tax rate of $4.24/$1,000 and future market value growth. 5 BOND ELECTION RESOLUTION A RESOLUTION CALLING A SPECIAL ELECTION TO BE HELD FOR THE PURPOSE OF SUBMITTING TO THE QUALIFIED ELECTORS OF SCHOOL DISTRICT NO. 91, BONNEVILLE COUNTY, STATE OF IDAHO, A PROPOSITION RELATING TO THE ISSUANCE OF UP TO $110,000,000 NEGOTIABLE BONDS OF SCHOOL DISTRICT NO. 91, BONNEVILLE COUNTY, STATE OF IDAHO, AND IN PROVIDING FOR THE ISSUANCE OF SUCH BONDS, THE LEVY OF A TAX TO PAY SUCH BONDS. WHEREAS, School District No. 91, Bonneville County, State of Idaho (the "District"), is a school district created and operating under the laws of the State of Idaho; and WHEREAS, the costs of acquiring, constructing, improving, renovating, equipping and furnishing certain school facilities, as specifically described in the form of ballot question set forth herein (such expenditures being herein referred to collectively as the "Project") are deemed by the Board of Trustees of the District to be required for the welfare of the District; and WHEREAS, the District does not have sufficient funds available to pay the cost of the Project and has determined it advisable to finance such cost through the issuance of general obligation bonds of the District pursuant to the provisions of chapter 11 of Title 33 of the Idaho Code, and in order to do so desires to call a special election to be held pursuant to Chapter 14, Title 34 of the Idaho Code. NOW, THEREFORE, BE IT RESOLVED by the Board of Trustees of the District as follows: Section 1. That a Special General Obligation Bond Election (the "Bond Election") is hereby called to be held in the District on Tuesday, November 7, 2017, for the purpose of submitting to the qualified electors of the District the propositions set forth in the form of ballot question appearing in Section 5 hereof. Section 2. That the District hereby determines that the outstanding amount of all bonded indebtedness of the District, including the bonds proposed under this Resolution, will not exceed five percent (5%) of the market value for assessment purposes of all taxable property within the District on the tax rolls completed and available as of the date of the Bond Election. Section 3. That pursuant to Section 34-1401, Idaho Code, the Clerk of Bonneville County, Idaho (the "Bonneville Clerk") shall administer the Bond Election, including scheduling RESOLUTION - 1 44177.0007.8926145.3 the polling times; preparing and printing the ballots; preparing and publishing notice of the Bond Election and the sample ballot; and conducting the Bond Election. Section 4. That in compliance with Section 34-1406, Idaho Code, the Clerk of the District shall notify the Bonneville Clerk that the District has called the Bond Election by delivering to the Bonneville Clerk a copy of this Resolution, including the forms of the ballot for the Bond Election set forth in Section 5 hereof and the notice of the Bond Election set forth in Section 6. Section 5. That the District hereby approves the following form of ballot question for purposes of the Bond Election: (Form of Ballot Question) Shall the Board of Trustees of School District No. 91, Bonneville County, State of Idaho (the "Board"), be authorized to issue general obligation school bonds of said District in the principal amount not to exceed $110,000,000 for the purpose of financing the costs of (i) renovating, repairing, equipping and furnishing Skyline High School; and (ii) constructing, furnishing and equipping a new Idaho Falls High School, together with all related furnishings and equipment necessary to operate said facilities (collectively, the "Project"), such bonds to become due in such installments as may be fixed by the Board, the final installment of which to fall due not later than twenty years (20) years from the date of issuance of such bonds, all as provided in the Bond Election Resolution adopted by the Board on July 25, 2017? The interest rate anticipated on the proposed bond issue, based upon current market rates, is three and twenty-seven hundredths percent (3.27%) per annum. The amount to be repaid over the life of the bonds, based on the anticipated interest rate, is $145,268,868, consisting of $110,000,000 in principal and $49,636,125 of interest, totaling $159,636,125, less $14,367,257 in estimated bond levy equalization payments. As of November 7, 2017, the total existing bonded indebtedness of the District, including interest accrued, is $40,924,905. IN FAVOR of issuing bonds in the principal amount not to ❑ exceed $110,000,000 AGAINST issuing bonds in the principal amount not to exceed El$110,000,000 (End Form of Ballot Question) Section 6. The Notice of Special Bond Election shall be in substantially the following form: RESOLUTION - 2 44177.0007.8926145.3 [Form of Notice of Special General Obligation Bond Election] NOTICE OF SPECIAL GENERAL OBLIGATION BOND ELECTION Pursuant to the laws of the State of Idaho and the Bond Election Resolution of the Board of Trustees of School District No. 91,Bonneville County,State of Idaho(the"District"),adopted on July 25,2017,notice is hereby given that a Special General Obligation Bond Election will be held in the District on Tuesday,November 7, 2017, beginning at the hour of 8:00 A.M. and closing at the hour of 8:00 P.M.on said date,on the question of whether the District shall be empowered to issue general obligation school bonds of said District in the principal amount not to exceed $110,000,000,to be repaid not later than twenty(20)years from the date of issuance thereof. Said election shall be held at the regular polling places for elections in Bonneville County,Idaho, [or by mail],as indicated below: [County Clerk to insert Polling Places and Absentee Votine Material) The following information is required by Section 34-439,Idaho Code: The projects to be financed by the sale of the proposed bonds are the costs of(i) renovating, repairing, equipping and furnishing Skyline High School; and (ii) constructing,furnishing and equipping a new Idaho Falls High School,together with all related furnishings and equipment necessary to operate said facilities. The date of the District's special general obligation bond election is November 7, 2017. The principal amount of the proposed bonds to be issued is not to exceed $110,000,000 to be repaid not later than twenty (20) years from the date of issuance thereof. The interest rate anticipated on the proposed bond issue, based upon current market rates, is three and twenty-seven hundredths percent(3.27%)per annum. The amount to be repaid over the life of the bonds, based on the anticipated interest rate, is $145,268,868, consisting of $110,000,000 in principal and $49,636,125 of interest, totaling $159,636,125, less $14,367,257 in estimated bond levy equalization payments. As of November 7,2017,the total existing bonded indebtedness of the District, including interest accrued,is$40,924,905. [End Form of Notice of Special General Obligation Bond Election] Section 7.That if at the Bond Election two-thirds(2/3)of the qualified registered electors of the District,eighteen(18)years of age or older who have resided in the District for thirty(30) days,voting thereat assent to the issuance of the bonds,as certified by the Bonneville Clerk,the negotiable bonds of the District shall be issued and mature not later than twenty(20)years from the date of issuance thereof,in accordance with the provisions of the Idaho Municipal Bond Act. RESOLUTION-3 44177.0007.8926145.3 Such issue will create a new debt to finance the Project, as approved, in accordance with the provisions of Section 33-1107, Idaho Code, payable from the proceeds of ad valorem taxes. Section 8. That said negotiable bonds shall be issued if carried as aforesaid and payment shall be made through the levy of taxes on all taxable property in the District, beginning in the year principal and interest payments are due and continuing until principal and interest shall have been fully paid in such amounts and at such rates as are necessary to assure the prompt payment of such interest, and also to establish and to constitute a sinking fund sufficient for the payment of the principal thereof as required by law, and it is hereby ordered that such payments shall be certified and such taxes shall be levied annually at the time and in the manner as general taxes for said District are levied in each such year; provided, however, that the aforementioned taxes shall never be diminished prior to payment of all bonds excepting in any year to the extent that other available funds shall have been applied to or set aside in a special fund to be irrevocably held for the payment of principal or interest or both, payable from said taxes for such year. The proper officer or officers of said District are hereby authorized and directed to do all things requisite and necessary to carry out the provisions of this section and to apply the proceeds of the taxes so collected to the payment of such principal and interest. ADOPTED AND APPROVED this 25`h day of July, 2017. BOARD OF TRUSTEES OF SCHOOL DISTRICT NO. 915 BONNEV_ILLE COUNTY, STATE OF IDAHO By: kQ I �(�' A�aW Chair (SEAL) AT:- /( By: Clerk RESOLUTION - 4 44177.0007.8926145.3