Gasconade R-2 board reviews pros, cons of no-tax-increase-bond-issue

By Roxie Murphy, Staff Writer
Posted 5/18/22

With three campus building tours down and one to go, the Gasconade County R-2 Board of Education on Monday night invited Dr. Brent Blevins of Stifle Institutional in Springfield to discuss what a …

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Gasconade R-2 board reviews pros, cons of no-tax-increase-bond-issue

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With three campus building tours down and one to go, the Gasconade County R-2 Board of Education on Monday night invited Dr. Brent Blevins of Stifle Institutional in Springfield to discuss what a no-tax-increase-bond issue would encompass.

“You are in great shape in the debt service fund,” Blevins began. “You are looking at what your needs are. The tax levy hearing will be held in August.”

A no-tax-increase-bond-issue would provide the district with funds designated for renovations, repairs or upgrades. Patrons would continue to pay the same rate on debt service, currently set at 67 cents per $100 assessed property valuation, for an extended length of time.

Blevins said the district is on track to determine its next no-tax-increase-bond-issue and advised that when looking at numbers not to ask for too much or too little. Not asking for enough will prevent projects from being completed and asking for too much could leave the district unable to pay its bills.

“The tax levy is determined every August to make sure we are in a good spot,” Blevins said. “We need to build in an interest rate cushion as they are on the rise, but I think $14 million does that.”

Blevins recommended the board borrow no more than $14 million, up from the $5,500,000 it borrowed in 2015 to purchase buses, and acquire, construct, renovate and improve school facilities within the district.

“In Missouri, you will need to call for the election by the January prior to the election,” Blevins said.

Blevins advised that the board determine if and when they want to go for a bond as soon as possible as rates are on the rise.

“In 2023, we will have to see what happens to the assessment value,” he said. “Assessment value should follow inflation.”

Construction costs are expected to rise as well.

“We will watch the market,” Blevins said. “We never want to come into a school district and ‘cook you.’ We want you to be able to get things done and come back in six to eight years to do more.”

It is up to the board to determine if they would like to run the ballot proposition in 2023 or 2024.

“There are benefits to both,” he hedged. “In 2023 — the sooner the better to avoid interest inflation and construction risks. Rates are expected to increase and economists project it to go on for quite some time.”

However, waiting for 2024 could mean the district’s borrowing potential increases.

“It falls into what the district needs facility-wise,” Blevins said. “I recommend sooner rather than later.”

Board President Glenn Ely asked about state guidelines regarding ballot language changes.

“For the bond, we are looking at what is legal ballot language, what it doesn’t state, that the debt service levy will remain unchanged,” Ely said.

Blevins said they would talk about how the board needs to report and prepare the community for the bond issue.

“Many people will ask ‘if we vote no, do taxes go down?’ The answer is no. You still have debt,” Blevins said. “If you pay down enough, eventually it may decrease, but that is unlikely. I don’t think the language will affect the outcome, but you will need more education to give the community moving forward.”

The debt service levy set at 67 cents per $100 of assessed valuation is estimated to be enough to take care of the facilities.

“You have positioned the fund balance well and it is getting heavy, so you should be able to pay the debt off early,” Blevins said. “You are in a great spot in bond issuance and debt service. You could do $14 million now and come back in another five or six years.”

The Long-Range Facilities Committee is scheduled to tour the last of the campus buildings, Owensville Elementary School, at 3:30 p.m. on Monday, June 6.