Schools may borrow money to save money

During a Superior Public Schools budget workshop, Monday evening, members of the Superior Board of Education mostly agreed with a proposal to utilize a lease purchase agreement to hopefully save district patrons money.

Matt Fisher and Tobin Buchanan, both vice-presidents from Public Finance, talked with the board about lease purchase agreements. Many schools have used them to lock in a price and pay back the money borrowed over time. In the past, lease purchase agreements have commonly been used by schools to finance equipment that could be repossessed like buses. Now school districts are using lease purchase agreements to finance brick and mortar projects because of some changes in statues.

Supt. Kobza reviewed long range capital improvement plans and related changes this year. Completed projects include: new students lockers in both the middle school and high school ($50,000), connected alarm panels ($25,000), HVAC and LED lighting ($100,000) and some technology purchases ($75,000) which were also funded with ARP ESSER (American Rescue Plan Elementary and Secondary School Emergency Funds related to COVID-19) money. In addition gymnasium floor concerns have been addressed.

Last year, it was thought roof repair could be done in sections and spread out over seven years.

However, Supt. Kobza said, "The roof has huge bubbles where moisture has gotten underneath the roofing material and expanded in the heat. They tend to be around roof penetrations. We need to move roof repair to a high priority if we do not want to lose the building."

The worst areas are over the cafeteria and middle school.

"In those areas, the membrane is on with a wing and a prayer," Supt. Kobza said.

The concrete WPA football stadium bleachers continue to sink as dirt washes away from underneath them leaving hollow areas and uneven concrete. Supt. Kobza indicated the bleachers had sunk three to four inches this year and some emergency work had been done near a fountain.

At some point, the board will need to decide either to make major repairs or to move the football field to the track and install needed equipment. Bargen questioned borrowing money to repair bleachers used only seven times each year.

Matt Sullivan, board president, said, "Earlier we projected moving the football field and lights would be a half million dollar project. I don't know what it will cost now, but at least the bleachers could also be used during the track season."

Bargen suggested football games could be scheduled for 4 p.m. so lights would not be needed.

The idea did not seem to be popular with the other board members.

Bargen added, "Some schools in western Nebraska do it."

For the past three years, the school's insurance inspectors have indicated the front entrance to the senior high does not meet current safety standards. Supt. Kobza also said there are floor tile popping up in the middle school because of poor parking lot drainage. He is also concerned about poor lighting in the parking lot.

Board members have consistently seemed to agree that the front entrance and the parking lot issues should be addressed at the same time for best use of resources.

Supt. Kobza also reported the preschool is full with a waiting list. Superior Public Schools must serve children with a disability. If there is still room, then peer mentors join the program. Kobza projected that within the next five years Head Start and private community preschools would not exist. At some point the board needs to discuss expanding the school's preschool facilities.

With the projected cost of some of the proposed projects having doubled this past year, a five percent inflation rate and money available at approximately two and half percent through a lease-purchase agreement, several board members indicated they think it is time to lock in construction prices even though the district will have approximately two million dollars available this next school year to address concerns.

Matt Bargen, a board member, said, "I am uneasy about borrowing money. If the elementary school bond was paid off and we get the levy back down it might be different. It just bother's me."

The building fund currently has a balance of approximately $425,000. If the 2021-22 budget passes as projected, tax asking will produce another $650,000 in the building fund, giving the school nearly one million dollars for capitol improvements. Plus, Kobza thought another million dollars could be made available from other sources.

Supt. Kobza reviewed the budget, tax askings, the levy, enrollment and valuation for the board. Total adjusted budget authority grew by eight percent. The general fund budget of disbursements and transfers increased by one million dollars. However, a significant portion of the increase is represented by ESSER funds.

The district's valuation is up four percent: nine million dollars in Webster County, 10 million dollars in Nuckolls County and $10,000 in Thayer County. This coming school year one cent on the levy will generate approximately $50,000.

School enrollment is steady. Over the past seven years enrollment has been as follows (starting in 2015-2016 to the present): 407, 410, 416, 427, 414, 411 and 415. However, only the last three years includes preschool enrollment.

State aid continues to be a budgeting factor. Whenever valuation increases, state aid goes down. State aid changes during the past seven years starting in 2015-2016 until the present are as follows: $269,055; $2,489; $43,490; $39,351; $353,634; $841,329 and this year $1,127,531.

After considerable discussion, board members instructed Supt. Kobza to increase the levy asking by one cent to generate money for the building fund. Over a 10 year period, one cent will generate approximately one half million dollars which represent one year payment on the elementary school bond payment if the money is not used for capital repairs. Tax asking will still be $15,600 less than last year. The total projected levy is $1.1229 which is approximately three cents on the dollar less than last year.

Supt. Kobza was directed to proceed to gather the figures needed to address three major projects: roof repair, front entrance remodeling and the parking lot. Sullivan projected it would take three million dollars to do the three projects. Other board members agreed it would be best to enter into a lease purchase agreement borrowing three million dollars and using tax generated building projects for other emergencies or to address other projects.

Board members asked for a public meeting for patrons after needed monetary figures are gathered. They hope a lease purchase agreement can be completed in September or early October.