In a committee meeting Monday, school board members discussed some issues surrounding the bond indebtedness and how that relates to funding options for alleviating issues at J.E. Harper Elementary School.
Bonding attorney C. Grant Schlueter, of Foley and Judell of New Orleans, explained where the Webster Parish School Board stands in its bond indebtedness and how much they would have if they decided to request another bond issue.
The bond district is the taxing district which includes all of the schools in Minden, says board member Ronnie Broughton. It’s different from the school board’s district 6, which includes more of south Webster Parish, like Lakeside Jr./Sr. High School and Central Elementary.
“The half-cent sales tax for district 6 looks like it’s producing $1.6 million per year,” Schlueter said. “You have one bond issue outstanding that is secured by that sales tax and it pays that bond issue. That annual debt service runs up to a maximum of $781,000.”
He went on to explain they looked what the additional bonding capacity is for that one half-cent sales tax and they came up with about $5.1 million.
“Keep in mind that unlike a general obligation bond where you get almost 100 percent of the bond proceeds for construction, we have to fund a reserve fund for the sales tax bond,” he said. “So that’s going to reduce somewhat the amount you will actually get for construction.”
District 6 is also paying for Qualified School Construction Bonds, secured by a constitutional millage, which is carrying a one percent interest rate. The payments are about $400,000 per year.
“You’re actually making the payments from this half-cent sales tax,” he said, “and with everything added together, you’re pretty much taking up that whole $1.6 million.”
That’s if the board decides to fund whatever option is chosen with the half-cent sales tax. If the board decides to go before the people, Schlueter says the legal debt limit would permit under state law to ask for up to 45 mills, which would generate a little bit over $25 million.
“There’s probably a lesser amount that could go to the voters and they can vote on it with no projected increase above the current 29 mills,” he explained to the board. “We’d have to run the numbers to see if that would generate enough money to see if that would be an option you wanted to consider. You would have no projected increase in the current tax rate being levied in this district.”
Superintendent of Schools Dr. Dan Rawls asked what this would generate, and Schleuter said roughly somewhere between $5 million and $9 million on an extension of the bond issue.
Schlueter again clarified if they use the half-cent sales tax and the levied bond, there would be no increase. However, they would be extending the debt, he says.
District 6 board member John Madden talked about not raising taxes because, he says, it will decrease the amount the school board receives in Minimum Foundation Program funds, the funds which go to pay teacher salaries and benefits. The MFP is based on a per student basis.
“We’re not doing our tax payers service by raising their taxes enough to finance any of these projects, and Baton Rouge drops it an equal amount,” Madden said of the MFP.
An array of ideas was discussed during the meeting, some even saying they liked the idea of a magnet school. Others were in favor of renovating the old vocational school as a permanent solution instead of the one-year option previously proposed while renovating Harper.
The most talked about idea was to build a new wing on to Webster Junior High School and house the sixth graders there, and move the kindergarten and first grade students at Harper to J.A. Phillips Middle School. This idea would cost roughly $6 million.
Another idea put forth was to combine J.L. Jones and E.S. Richardson and build a new site to the tune of $20 million.
Broughton says he feels a new site would never fly with his constituents.
“I just do not see that happening,” he said. “The only thing that we might could do is build a sixth grade wing at Webster…and move the Harper kids to Phillips as K-1.”