The Commercial-News, Danville, IL

October 25, 2012

School board looks at bond issue for renovations

BY CAROL ROEHM
Commercial-News

DANVILLE — The Danville School District 118 board heard a presentation Wednesday from a bond adviser about bond alternatives for the East Park Elementary School renovation project.

In April 2011, $21.5 million in bonds were issued to cover the renovations at South View and North Ridge middle schools with the understanding that a smaller bond issuance would be needed for the East Park project.

East Park, formerly was a junior high school until the 1980s, is the third and final school to be improved in the district’s three-year renovation project. South View Middle School was renovated in 2010-2011, and work at North Ridge Middle School is on schedule with completion expected in mid-December.

All three facilities originally were constructed as junior high schools in 1961.

The renovation projects were budgeted in such a way as to not affect the local school tax rate, but East Park is the last and the largest of the three schools to be improved, and the money that is available will dictate how much will be renovated at East Park.

Bond adviser Anne Noble of Stifel Nicolaus investment banking told board members the original plan was to fund $8.5 million for the East Park project, however, the equalized assessed valuation in the district has dropped by 18 percent in the last four years, which affects how much tax the district can levy to support the bond issuance without raising the tax rate.

“Your EAV hasn’t done what we expected it would do,” Noble said. “We’re down about 18 percent during a period where we thought the EAV would be flat.

“It affects all operating dollars to the district,” she said.

This year, the owner of a home valued at $66,500 and who was taxed 58 cents per $100 EAV paid $93.52 toward the bond issuance for the South View and North Ridge middle schools renovations.

Next year, with the district’s EAV projected to decrease by 9 percent, Noble said the same home could possibly decrease in value to $60,515, necessitating a slight increase in tax rate from 58 cents per $100 EAV to 60 cents per $100 EAV in order to support a $6.5 million bond for East Park’s renovations.

“Even with raising the tax rate to 60 cents, the revenue you collect will drop,” Noble said.

In that scenario, homeowners would pay $85.06 a year toward the East Park bond.

“We’re truly at historic lows with interest rates, but we still can’t get $8.5 million with that loss in your tax base,” she added.

Superintendent Mark Denman told the board, “We’re leaning toward $6.5 million (bond issuance) because we can still get the project done without an increase to the taxpayers.”

Any additional money needed for the project beyond the $6.5 million would come from the district’s operational fund.

Board President Bill Dobbles added, “Without the $6.5 million, we would have a real difficult time getting East Park done.”

At the Oct. 10 school board meeting, Architects from Schmidt Associates of Indianapolis estimated the cost of the East Park project, without any alternates, to be between $10.75 million and $11.75 million.

By comparison, the renovation work at South View cost $12.3 million, while renovations at North Ridge cost $13.8 million.

The East Park project will be put out to bid in four packages — general contractor, electrical, plumbing and mechanical — during the first week of November, with bids being presented to the school board at its Dec. 12 meeting and contracts hopefully being awarded Dec. 13.

Renovation work could possibly start as soon as Christmas break, with the work on the existing building being substantially completed in mid-August 2013.

The base project includes installing a new roof, replacing the sidewalks around the school, grading the land around the building, replacing drainage pipes and making them larger in the courtyards, replacing the fixtures and repairing the restrooms, creating two new classrooms in a commons area that might be used as a computer lab and paving the school’s parking lot as well as the road around the school that connects to Colfax Street.

Unlike South View and North Ridge, the lockers — which are a leftover from its junior high days — won’t be replaced at East Park because elementary school children don’t use lockers. The existing lockers will be removed.

The possibility of building a cafetorium like at South View and North Ridge has been ruled out. However, depending on how the bids come in, school board members will consider two options that could be added to the architects’ base bid.

Option 1 would entail constructing an addition to the east side of the gymnasium for a cafeteria with a seating capacity of 448 that would adjoin the existing kitchen. That alternate work is estimated to cost an additional $1.55 million to $1.65 million

Option 2 would entail the construction of a new cafeteria with a seating capacity of 448 and a new kitchen built in the large grassy area to the south of the main entrance of the school. That alternate work is estimated to cost an additional $2.2 million to $2.3 million.

Also on Wednesday, the school board:

--Heard a presentation on the city’s plans to improve an area around Danville High School.

David Schnelle, City of Danville’s urban services director, presented design plans that entail redoing the DHS south parking lot and a grassy area along Hazel Street that had been acquired by the school district years ago.

The project — which will include berms, drainage improvements, additional lighting, handicapped parking spaces next to the field house and a practice field for the marching band — is at no cost to the school district.

The city, which plans to put the project out to bid in January, will use grant money and TIF funds to pay for the work that is expected to start in the spring.

A year ago, the city received a $750,000 Illinois EPA grant to assist with the construction of an environmentally-friendly parking lot and campus storm water improvements at DHS. The grant requires a local contribution of $574,211 to be paid from the Midtown TIF funds.

Other aspects of the plans include using bio-swales, infiltration basins and landscaping that will allow water to pass through while filtering out pollutants before releasing the water back to the storm sewer system and watershed.

--Approved increasing the pay rate for substitute teachers to $95 a day from $85.

Kathy Houpt, human resources director, told the board the district needs to increase the number of substitutes on its roster, and to make the district more competitive, she recommended an increase in pay $90 a day from $85. The substitute teacher rate of pay had been $85 a day for five years.

She said the pay rate increase would “entice people to substitute for us instead of county schools.”

Board member Dr. Randal Ashton, however, asked that the pay rate be increased further to $95 a day.

“I think if we’re going to spend any dollars, it should be spent on direct education to make sure we have the best quality teachers we can possibly attract,” he said. “I think it would be money well spent.”

Raising the pay rate to $95 a day would cost the district about $32,500 a year based on past use of substitute teachers.

“We have spent that amount of money on buying properties in the past month,” Dr. Ashton said, referring to the purchase of several properties on Hazel Street near the high school.

Denman said, “We recommended $90 a day to be fiscally responsible.”

The board voted 4-2 to increase the pay rate for substitute teachers to $95 a day. Board members Dan Brown and Gina McGuire cast the dissenting votes.

The board also approved increasing the pay for retired District 118 teachers who substitute to $115 a day and approved an increase in pay for long-term substitute teachers. Those substitutes will be paid at the salary of a beginning teacher starting on the 11th day of service.

--Purchased 26 tables and 600 chairs for $24,622 from Frank Cooney of Wood Dale for the North Ridge Middle School cafetorium.

--Approved to hire Frank J. Strahl & Sons, Inc. of Danville for $6,690 to remove the existing non-working hot water heater and install a new one at the DHS pool. The total cost, including the purchase of a new hot water heater, is $21,761.

Coming Up

District 118 school board members will meet at 6:30 p.m. Nov. 14 at the Jackson Building, 516 N. Jackson St.