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The board of directors couldn't get passed the review of the construction budget to take any action on authorizing work to the building projects, approving the revised schematic designs and moving forward with bidding contracts for the pre-grading phase of the construction work, possibly delaying the schedule by six months.
If the board does not schedule a special meeting soon, contractors will not be breaking ground at the new high school site in October as originally planned. Despite the potential delay, which could keep students in the waning Menlo Elementary building another year, the Facilities Cost Management Group will continue working through the plan for the district.
However, the superintendent and board were shocked and discouraged to learn much of the project will depend on cooperation with the City of Stuart. Although Facilities Cost Management financing specialist Merle Rambo argued the board was fully informed through the tax management plan how the projects would be financed, the board unanimously agreed they felt misled.
"I apologize if there is a lack of familiarity with how things work, but it's all part of the development of a project that you all approved months ago," Rambo urged.
The surprise came when Rambo discussed the district's sharing options with the City of Stuart to help fund approximately $800,000 in infrastructure costs not included in the bonded $16.95 million for the Stuart Elementary and future high school buildings. While Rambo holds many bonded projects do not figure in infrastructure costs, superintendent Dr. Dave Arnold disagreed, stating such costs are "the expectation of what the budget entails."
"We're kind of at the city's mercy - we're in a corner," director Carey Gilman said. "This is a big blow, and it comes completely as a surprise to me."
In order for the district to continue with the projects as outlined by Rambo, it would have to enter a 28E agreement with the City of Stuart to help pay for infrastructure and potentially some of the building costs, whether or not the city library is included in the Stuart Elementary project as proposed. Stuart city councilors Bryan Belden and Neal Crawford were present on behalf of the city to discuss sharing options. The school district plans to continue with joint meetings with Stuart city officials to discuss those options.
"There's always been an assumption we would help with infrastructure costs - that's just part of the process," Crawford said. "I'm hoping the dual-use library isn't seen as something the city is trying to force upon you. It would help out the city by saving us money which could then allow us to help more with infrastructure costs."
Despite the collective shock among board members, Rambo insisted details about infrastructure costs were outlined in the comparative budget and funding data given in the long term facilities and tax management planning documents approved by the board months ago. In fact, each of the documents, dating as far back as October 2007, did state in a note at the bottom of the pages, "Preliminary budget allocations exclude fiscal and related costs and fees, land costs, legal expenses and furnishings... Excludes street work, off-site and relocated utilities expenses assumed to be financed separately."
Rambo said it makes sense to do it that way. Otherwise, it would be unfair for taxpayers outside of Stuart city limits to have to help pay for utility pipes and streets on city property off the school site. He said the City of Panora had a similar arrangement for the Panorama School District's bond issue.
"The notes that consistently appear at the bottom of the budget explain what is in and out of the budget, specifically listing the infrastructure items, among others," Rambo said in a later interview. "The reinvestment income gained from bond proceeds is also listed as a part of the budget which decreased the amount sought from the taxpayers in bonds, and thus, reduces annual taxes."
Rambo told the board it could have set the bond issue at $18 million to include the extra costs, but following the tax management plan will allow the district to save its tax payers an estimated $25,000 a year using by partnering with the city.
"It's a win-win situation," Rambo said in a later interview. "A partnership with the city lowers the tax levy for the school district based on TIF funds already available through the city. Not having to bond for the full amount saves taxpayers money."
Despite Rambo's urging to the contrary, Gilman moved to table all other matters regarding building projects until Arnold checks for other architects that could feasibly do the projects, including infrastructure, within the $16.95 million. The board voted unanimously in favor of Gilman's motion.
Before exiting the board room, Rambo said, "We've spent a fair amount of time with the district and its voters, and we believe voters understand this. But, it's my duty to tell you, spending time doing this may further distract what you're about to do financially.
"I will stand on the advice that you develop your budget with the same energy as you try and manage it."
Despite concerns over the budget, work is moving forward at the building sites, and hazardous materials have now been removed from the west wing of the current high school building in Stuart. It is slated for demolition within the next seven to 10 days.
Meanwhile, the board will hold a brief special meeting Monday, July 28 to award the sale of the first $10 million bonds to the lowest bidder, Sterne Agee & Leach, Inc. at a rate of 4.37 percent, and the district is preparing to start spending.
Unfortunately, though, the district did miss out on about $300,000 worth of reinvestment dollars, because it waited until July to sell the first $10 million in bonds. If they would have sold them in April or May, when there was a healthier interest market, the district would have gained $750,000 to get it started on these projects, rather than the $410,000 it will see today. if they had been sold in April or May.
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