High school district considers new construction timeline

03/02/2009 12:10 PM

12/13/2010 9:35 AM

The Merced Union High School District met Saturday afternoon to decide how the district should reorganize its five-year facility plan in light of financing complications.

A decrease in assessed property values and an increase in financing rates caused Merced Union High School District to put off the sale of general obligation bonds last month.

The sale of the bonds, which was authorized when voters passed Measure M on Nov. 4, 2008, will fund more than $200 million in school construction projects.

Under the original bond selling plan, which was created in the relatively better economy before the November elections, all bonds were to be sold by August 2013 and all construction projects were to be completed by 2014.

Under the current fiscal constraints, the last bond sale may occur as late as 2022; area residents would pay for portions of the bond in their yearly property tax assessments until 2062.

The question of the day Saturday was: When to build the new high school?

Under the agreement voters approved (Measure M), the district cannot tax property for this bond sale more than $30 for each $100,000 of assessed value each year.

To keep property owners’ payments below the $30 threshold, the district will have to extend the time period between each sale, which lengthens the timeline for school construction projects.

“Bellevue Road Area High School requires $63 million or more in local bonds over two years,” according to the staff report on the issue. “The large cost of the project requires it to be on one side or the other of the nine year bond issuance gap from 2013 to 2022 and the majority of the other projects to be on the opposite side of that gap in time for bond issuance.”

The board evaluated two scenarios for bond sales hoping to come to a consensus on an answer. In the first schedule, the district would sell bonds to cover many smaller projects in the district before completing the new Bellevue Road Area High School. The second scenario has the district building BRAHS and a handful of other projects first and the balance of the projects later.

Building any of the projects later will cause costs to increase. Building Bellevue in now without one planned classroom building will cost $68 million. In 2019, the cost will balloon to $132 million and the band/theater building will also be dropped. (Board members all said they would be reluctant to pass any plan that cut this building from the campus.)

Board members and district staff debated the merits of both plans.

Superintendent Scott Scambray said the list of construction projects should be arranged because some schools would have no upgrades for several years in scenario B, the arrangement most board members were leaning toward.

Scambray said the only improvements at Merced High School for the first nine years in that plan are the installation of security cameras.

Other board members agreed that nine years was a long gap, but said crowding at Merced High would be significantly decreased by the construction of Bellevue. As more students are shifted from Merced, dilapidated portables can also be removed from campus.

Board member Tim O’Neill said crowding at Merced and Golden Valley are significant concerns. Presuming that the population doesn’t grow at all from now until 2019 – the late date for construction of BRAHS – both current Merced campuses would be overcrowded 1,000 students from now until then. If the local population does grow, the current campuses will see more portables or students might have to be bused to Atwater schools.

In both scenarios, some projects are dropped completely. In scenario B, the dropped projects are the new bus yard, purchase of a Kansas Street school site, and the update an modernization of some Livingston High School projects.

The district may have some wiggle room by finding other funding sources.

Deputy superintendent and chief business officer Diane Hockersmith said the district is expecting approximately $2.6 million in federal stimulus funding. That money might be used to take some of the modernization projects out of the Measure M funding list to move other things up or bring back some dropped projects. Money from the federal stimulus package can not be used on new construction.

Bruce Kerns, the district’s financial analyst from Stone and Youngberg, is expected to be at the next school board meeting on March 11 to answer questions and help the board pick schedules for bond sales and for construction.

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