Board hears construction management pitch

Image
  • John Blackburn (right) with Live Oak Public Finance presents the Sulphur Bluff ISD’s financial profile the board and business manager Janice Teer Thursday night. He advised quick action in passing a bond while the Dike solar farm is still highly valued. Staff photo by Todd Kleiboer
    John Blackburn (right) with Live Oak Public Finance presents the Sulphur Bluff ISD’s financial profile the board and business manager Janice Teer Thursday night. He advised quick action in passing a bond while the Dike solar farm is still highly valued. Staff photo by Todd Kleiboer
Subhead

Solar farm’s value means possible renovations, new projects

Body

SULPHUR BLUFF—With the Dike solar farm’s high tax value first hitting the books in 2021, more revenue will be available to Sulphur Bluff ISD, and its board heard Thursday night a breakdown of what a future bond project could look like if they choose to take advantage of the new revenue.

“It’s going to present an opportunity for you to be able to do a few things and afford a little bit more than what you might have before,” John Blackburn, advisor at Live Oak Public Finance in Austin, said.

In his estimates, Blackburn warned the board that solar farms lose their tax value quickly, meaning if a bond is wanted, the board should act within the next year to determine what the district needs.

“If you have the [bond] election in May of 2021, you would actually have the election and turn around to begin the bond sale process,” Blackburn said. “Within that next month, you would have get your values for the 2022 year, meaning you would get to see if you would actually get that full solar value or not.”

Robb Sidebottom with Gallagher Construction Services said a campus walk-through is scheduled to aid in the process of creating a district needs assessment that will address classroom efficiency, possible structural problems and building code.

“Our goal is to come in and help to provide all the information you need to decide to do nothing or something,” Sidebottom said. “And if it is something, what does it look like?”

The district is currently paying off a bond through 2026, and it is paid through a voter-approved tax rate. With the solar’s farm added value, the revenue generated from that rate will be more than the regular payment the district makes on the bond.

“If you did go up to 11.5 cents rate [opposed to the district current 6.5 cents rate] and do a 25- year bond, you would be able to, including your existing debt service, afford right in that $3.1 million range,” Blackburn said.

The board made clear their desire to not raises taxes anymore in the district, but Blackburn illustrated what the district could do if a bond was passed that kept the current tax rate.

“If you were to keep your tax rate as is, and you were to do a 25-year bond, then you would be able to do about $1.6 million bond, with your current debt service included,” Blackburn said. “That would be at zero increase.”

According to Blackburn’s research, SBISD has an average tax rate compared to other nearby districts like Miller Grove, Sulphur Springs and North Hopkins.

“In this instance, where you are compared to districts around you, a tax increase is not the end of the world, and it would not be perceived that way,” Blackburn said. “You could potentially tell the public, look, we are increasing taxes a bit, but not anywhere close to some of the districts around us.”

Dr. Robert Jolly with Gallagher pitched the company’s services in assisting with the construction and bond process, citing the company’s portfolio of constructing school buildings for small and rural districts.

“Gallagher is faithbased, relationship-oriented company,” Jolly, a former educator, said. “I learned that at my seven years at Crandall ISD.”

The board made no commitment toward Gallagher but will hear their needs assessment at a later date.

SCHOOL BUDGET

According to business manager Janice Teer, the proposed 2020-21 budget is almost the same amount as last year’s, having increased only about $2,000. The proposed budget is set at $3.1 million.

The predicted difference between revenue and expenditures is a cushion of about $53,000, but Teer said real outcome might slightly higher due to a projected, but not likely, lunch deficit.

“That [lunch deficit] would be if we collected just that [amount] and spent all that,” Teer said. “That’s not typically what we do.”

That extra cushion sparked a conversation among board members about a possible bonus for the district’s 41 employees. The district already gives a $350 retention bonus to teachers at the start of the year, but board member Chris Bassham said with expenses going up due to COVID-19 impacts, another bonus would be well-received.

“Groceries are going up. Everything is going up,” Bassham said. “They all need it.”

There was some talk about making the bonus a single stipend or a raise, and the board settled on a December bonus for all district employees. In their plan, teachers would receive $1,000 while aides and staff would receive $600. Superintendent Dustin Carr said he would run the plan by the business office to make sure the district could do it.

“Overall, every one of them is coming in and having to deal with all this corona junk,” board member Zach Collett said.