•Replace kitchen hood, which is undersized for amount of equipment. For Malone Intermediate School (the old high school), which houses grades 3-5, the needs identified are: •Abate old chemistry …
•Replace kitchen hood, which is undersized for amount of equipment.
For Malone Intermediate School (the old high school), which houses grades 3-5, the needs identified are:
•Abate old chemistry lab and adjacent room. Currently used as storage and could be 2,460 square feet of instructional space.
•Asbestos abatement in non-usable instructional rooms, in flooring and counters.
•Dryer needs combustible air intake.
•Upgrade inefficient/outdated fresh air intakes.
•Kitchen hood needs fire suppression system to be in compliance with safety code.
•Replace old/inefficient exhaust fans (from 1969).
•Replace boiler chimneys – clearance and code.
•Relace outdated panel boards (past life expectancy), clock system (semi-functional), fire alarm (obsolete/not code compliant).
•Generator replacement; currently not placed to code requirements, can’t get parts.
•Replace outdated/unreliable electrical switch.
“We are looking at the generational repair stuff we have to do and all these items that are on this long list we have, that was developed with myself and SDS Architects … they’re 20- to 25-year items,” Hoikka said. “They’re not just remodels. They’re long-term fixes to keep our buildings operational and safe.”
Citizen FAC spokesperson Dan Roth said Hoikka and the FAC, comprised of residents from Prescott, Oak Grove, Trimbelle, Diamond Bluff and Clifton, are working to provide the board three viable options to vote on by Dec. 1, which will determine the bond question for the district’s February referendum.
“We haven’t had a lot of time to really sit and digest everything that’s out there,” Roth said. “If anybody sees me out there, tug on my shirt and tell me what you think. I want to do the best thing for the community. It’s not always going to be the popular vote, right, because we have to pay for it. But the thing is, our schools really do need some work, a lot of work.
“You don’t want a leaky roof on your house. You don’t want a leaky roof on your school.”
The FAC has met twice and identified priorities centered on MES and MIS. Divided into two groups, FAC categorized items as High Priority (HD), Definite Priority (DP), Low Priority (LP) or Not Priority (NP). The preliminary categorizations are: MES – roof replacement, exterior tuckpointing, windows and doors, HVAC upgrades, ADA compliance, kitchen hood (HP); electrical system upgrades, plumbing, kitchen upgrades (LP); pavement repair/ replacement (NP).
MIS Group 1 – Roof replacement, paving repair/replacement, plumbing/ADA compliance, asbestos abatement (HP): electrical system upgrades (DP); tuckpointing, windows, doors, HVAC upgrades (LP). MIS Group 2 – Roof replacement, asbestos abatement (HP); tuckpointing, windows and doors, electrical system upgrades (DP); paving repair/replacement, ADA compliance/ plumbing (LP); HVAC upgrades (NP).
“Look at these things,” Roth said. “What would you do at your home if you had to do them at your home?”
The FAC has no costs or exact recommendations yet; however, Roth, who is in the construction business himself, said the roofs will not last another seven years.
“We have to do the roofs and building envelopes; we just have to,” Roth said.
He reminded people of the past Prescott Middle School mold situation and closure in 2003.
To illustrate priorities, if the group had $100 to spend, it would split it this way: $26.09 to MES, $48 to MIS, $15.82 to PMS.
School Finance 101
Lisa Voisin, a public finance banker with Baird Financial, educated the audience on options to finance costs associated with identified essential maintenance, repairs and replacements at PSD facilities.
PSD is “very well positioned financially,” Voisin said. “However, people always ask ‘Why can’t we pay for facility maintenance items out of our operational funds, or on an annual basis?’” Smaller projects, such as a boiler or carpet, can absolutely be paid for that way, Voisin said. Whether it’s from the annual budget, the fund balance (Fund 10) or a capital project savings plan (Fund 46), that’s an option. But, using Fund 46 money requires that that item be listed on a 10-year capital plan. The items in the FAC’s list are on the 10-year plan, Hoikka confirmed, but when put all together, they cost more than Fund 46 could provide at this time. Plus, Fund 46 cannot be used until 2022, per state law.
With larger ticket items or multiple items, districts don’t have a choice but to ask for voter-approved borrowing, Voisin said. Yes, the district’s current fund balance is $5.65 million, but the district uses this to bridge gaps when it pays its expenses every two weeks (salaries, benefits, insurance, utilities), but only gets its taxes once per year and state aid four times per year.
“Districts without strong fund balances have to borrow” short-term to bridge expenses, Voisin said. “Thirty-five percent fund balance (which Prescott has) is music to my ears.”
A solid fund balance leads to a more favorable bond rating. Recently, Moody’s Investments upgraded the district to an Aa3 rating. The higher the bond rating, the lower the interest rates, which saves taxpayers money. Aa3 is a great bond rating for a district Prescott’s size, Voisin emphasized.
The total tax levy for 202021 was $9,582,245, which includes three components: Revenue limit (dollars used for operations dictated by the state formula) of $6,752,665; community service (community education and Prescott Community Rec) of $150,000; and voter approved debt of $2,679,580. State law requires that voter-approved debt be held in a separate bucket, so to speak, than the revenue limit.
The mill rate is calculated by dividing the tax levy ($9,582,245) by the total school district property valuation ($893,613,988), and moving the decimal point, resulting in a mil rate of $10.72. A $100,000 home would pay $1,072 in school taxes annually.
The higher the district’s property valuation, the lower the levy. Earlier, Roth had said that due to the number of new developments in and around Prescott and more people and businesses coming in, now is the time to do a maintenance referendum because more people equal less tax burden.
The mil rate has steadily declined since 2014, when it was $12.43, Voisin said.
Another thing that will help lessen the residents’ tax burden is the retirement of Tax Incremental Financing districts. When a city creates a TIF, their goal is to attract business, so they usually agree to build infrastructure and roads to do so. To do that, a city has to borrow funds. Once a business locates in a TIF, their tax payments go toward paying off that city debt for a certain number of years, until that debt is paid. Once paid, the tax payments then contribute toward the city’s tax base, thereby easing tax burden on residents.
Prescott’s TIF 3 will close in 2021, adding $13,327,000 to the overall property value, Voisin said. In 2026, TIF 5 will close, adding $41,950,000 to the overall property value. And in 2030, TIF 4 will close, adding an additional $17,364,000.
Another question Voisin gets frequently is “What is the debt limit of a school district?” It is 10 percent of the district’s overall property (equalized) value. For Prescott, that number is $96,625,569. As of March 1, 2021, outstanding district debt is $35,260,000 (PAC and PHS). Even with a referendum, the district won’t get remotely close to its limit.
“I believe we will be able to set up the district with no increase in its mi rate, if it borrows $8 to $12 million,” Voisin said.
That’s if operating expenses stay flat. In 2021-22, the hope is to prepay more debt, which helps reduce the tax burden as well. This can be done with leftover revenue limit funds. The district also recently refinanced debt to a lower interest rate, saving $1 million in interest. That savings must go to reduce the district’s debt service, Voisin explained. It cannot, by state law, be used on teachers, programming, etc.
Every state has a different formula for school funding, Voisin said. In Wisconsin in 1993, the legislature implemented a revenue limit formula, which limits the amount of revenue school districts can collect from taxpayers, based on enrollment. When that amount doesn’t provide enough funds to cover expenses, the first items on a budget axed are always the maintenance items, Voisin said. You have to pay teachers, insurance, benefits, utilities, transportation costs, etc.
“You can’t just levy a tax to pay for what you need, like they did in the 80s,” Voisin said.
When did the district last go to referendum? Here is a timeline: May 25, 2016 – $1.46 million, exceed revenue limit, recurring every for four years, passed.
Feb. 16, 2016 – $1.87 million per year, non-recurring exceed revenue limit, for maintaining existing educational programs and staff, failed.
Feb. 7, 2015 – $3,890,000, issue debt, new Performing Arts Center, passed.
April 1, 2014 – $4.26 million, issue debt, new Performing Arts Center, failed.
April 1, 2014 – $110,000 per year, non-recurring, for four years, exceed revenue cap for funding new high school operating expenses, passed.
April 1, 2014 $27,890,000, issue debt, new high school, passed.
Nov. 8, 2011 – $1.46 million per year, non-recurring, four years, exceed revenue cap for maintaining educational programs and staffing, passed.