School board approves tax cut
The Fairfield Community School District will hold a public hearing for fiscal year 2014-15 budget at 6:30 p.m. April 14, at the Administration/Curriculum/Technology Center, with a proposed property tax levy rate of $13.99 per $1,000 of assessed valuation, a 2.5 percent decrease from this year’s $14.34 levy rate.
“This is a 35-cent decrease in tax rate,” said Superintendent Art Sathoff Monday. “And it includes setting escrow funds aside for bond savings to taxpayers of $450,000.”
The district’s $10 million general obligation bonds approved by voters to renovate Fairfield High School can help lower the district’s tax levy, Sathoff told the school board in February.
District business manager Kim Sheets had told the board the district could levy surplus dollars to pay for the bonds that will become due at the end of the bond payment period.
“These extra funds will be held in a special escrow account at Bankers Trust, accruing interest until the account matures at exactly the same time the bonds become callable in 2021,” said Sheets.
According to Matt Gillaspie, senior vice president at the district’s financial advisors Piper Jaffray & Co., the school district could save taxpayers future interest expenses of $451,522, depending on interest rates, Sheets said in February.
The board voted Monday to amend the bonding resolution, allowing the district to pre-pay some of its long-term debt through the escrow account. But because it also raised the tax levy for debt service from 95-cents this year to $2.70 next fiscal year, board member Jerry Nelson voted no. The resolution passed 5-1; Jennifer Anderson was absent Monday. Nelson did not like raising the debt service levy, even though the total levy is still decreasing 35-cents.
The district’s general fund levy rate is decreasing by $2.53, from $10.76 this year to $8.24 next fiscal year; and the instructional support levy is slightly lower, from 59-cents this year to 56-cents next year.
Besides the debt service levy, the only other portion of the levy increasing is the management levy, from $1.03 this year to $1.50 next fiscal year, an increase of 47-cents.
“We’re moving some equipment repairs expenses from general funds to the insurance policy under the management fund,” said Sheets. “The state limits how much cash reserve we keep in the general fund and it can’t go any higher.”
Sathoff said the district has done a good job of building up its spending authority.
“Our unspent balance took a nice jump,” said Sathoff.
In February’s financial report, the district’s unspent authorized budget balance is $1,096,412.
“This is an estimate of what we expect to see when the books are closed at the end of the year,” said Sheets. “It’s authority, not cash.”
FHS renovation stalls
Sathoff said the district divided the high school renovation project into 10 separate bid packages, such as electrical, plumbing, drywall work, etc. The bids were due March 6 and were opened and reviewed by administrators.
“Fred [McElwee, auxiliary services director] and I worked through the bids and tried to figure out how to make this work,” he said. “We met with our construction manager and architect, high school administration and business manager, but the overall bids came in $2 million over budget.”
Not every package came in over budget, but a couple of larger packages did.
“We’re looking at the possibility of re-bidding some of the bigger packages,” said Sathoff. “We’re looking for savings within packages. The goal is to come up with $2 million in savings.
“We may look at the district’s ability to bond against capital.”
Another option is to go back to the drawing board, said Sathoff.
“Do we need a re-design of the project? Maybe we need to change the project and have new drawings and plans and re-bid everything,” said Sathoff.
This seemed to be the last choice of administrators.
“There’s a fine line, a balance of value engineering, before we need to re-bid,” said McElwee. “Several bids were within our budget but some were significantly higher.
“Carl A. Nelson & Company [construction management team hired by the district for the high school project] is talking with contractors,” said McElwee. “We expected some contractors to bid — they had indicated just a few days before the deadline they would bid — then they didn’t submit a bid.”
Sathoff said the high bids were a negative surprise.
School board member Phil Miller asked if this was unusual.
“If the architect and construction manager know the bond amount, were they surprised at the high bids?” said Miller.
Sathoff said bids are always unknown until opened, but these were a surprise to everyone.
“Talking with Piper Jaffray & Co., they said they’ve been seeing higher bids this year,” said Sheets. “Contractors are not as hungry as they have been.”
The bids opened March 6 are good for 30 days.
The school board will call a special work session to review the bids and brainstorm about possibilities.
In other business Monday, the board accepted Sathoff’s formal resignation from his job as superintendent with the district, effective June 30.
“I want to thank the district and community for letting me serve,” Sathoff said. “I’ve never been happier personally and professionally as I have here. We’ve made good progress in the budget and in the district.”
Former Fairfield school board member Bob Waugh spoke during public comments.
“We hate to see Art [Sathoff] leave and I appreciate my time working with him,” said Waugh. “Thank you for the time and effort devoted to the district.
“I’ve had three people call me to come speak tonight about the superintendent having a three-year contract with the district.”
Sathoff has been superintendent in the Fairfield district for three years.
In June, the Fairfield school board extended Sathoff’s contract through the 2015-16 school year, at $149,040 in annual salary.
Indianola has offered him a three-year contract at $200,000 a year.
“I feel it should be of value of something to get out of his contract,” said Waugh.
Nelson said he’s also received calls about the same issue.
“Probably there’s nothing in this [Sathoff’s] contract, but we probably should have it in the next contract,” said Nelson.
The board begins meeting with superintendent search firms tonight. A public meeting at 6 p.m. at the A/C/T Center will feature two or three firms. The board plans to meet with a few more next week, to hear presentations of services and costs, then hire one firm.