Have a Question on $55 Million in Taxes Ames Schools Will Spend

Anyone with a question about the $55 million bond referendum, to replace and renovate five elementary schools, that isn't already found below are sure to find an answer at a noon forum Tuesday on the bond referendum at the .

Superintendent Tim Taylor plans to explain the issue during the Ames Chamber of Commerce sponsored forum.

On April 3, voters will be asked if they would support “$55 million in general obligation bonds to provide funds to build, furnish, and equip elementary school buildings and improve the sites at the district's property on the current site, the current site, and district property on Miller Avenue; and to reconstruct, repair, improve, remodel, furnish and equip the and elementary buildings.”

Bonding $55 million would raise property taxes by about $1.70 per assessed $1,000 valuation, but there will be in the next year, even if the bond referendum passes due to a number of factors.

True enrollment has remained relatively flat, but certified enrollment has dipped in some cases because of the way students are counted. 

, for example, are now counted as .5 accounting for about 30 of the 55 certified student enrollment loss. They used to be counted as .6 of a student.

The district's property tax base has also increased in value so the property tax levy used for the general fund is decreasing for that reason as well.

District officials have said new buildings are necessary because the current buildings are outdated and crowded in some cases.

Tuesday's forum is sponsored by the Ames Chamber of Commerce but anyone is welcome. People can register for the event by contacting Angela Davidson at angela@ameschamber.com.

Editor's Note: An earlier version of this story reported an outdated property tax levy rate for the bond referendum.

Read the Frequently Asked Questions about the school bond created by the school district below:

Ames Community School District School Bond Referendum Frequently Asked Questions

“Shall the Board of Directors of the Ames Community Schools in the County of Story, State of Iowa, be authorized to contract indebtedness and issue General Obligation Bonds in an amount not to exceed $55,000,000 to provide funds to build, furnish, and equip elementary school buildings and improve the sites therefore at the District property on the current Fellows Elementary site, the current Meeker Elementary site, and District property on Miller Avenue; and to reconstruct, repair, improve, remodel, furnish and equip the Mitchell and Sawyer elementary buildings and sites?”

Why are so many building projects proposed all at once?

Our elementary buildings range in age from 40 to 60 years and their mechanical, electrical and structural systems require extensive repairs or renovations for continued use. The current building structures and systems lack security and safety features to protect students and staff. The report entitled “Report on Condition of the District Facilities” prepared by Gerry Peters, Director of Facilities Planning and Management, explains the facilities needs. This report is posted at the Ames Community School District website, www.ames.k12.ia.us under School Board, Facilities Information, 11-08-10.

Why did the Board recommend the schools at the proposed sizes and locations?

Based on its assessment of the District’s student populations, geographic features, and operating costs, the Board approved the five-school plan to provide — in line the District’s financial constraints—flexibility for programming and fluctuating grade-level enrollment within school boundary areas. The plan addresses changes in the education system that have occurred since our current schools were built. Schools now need classrooms for programming that did not exist in previous generations, such as special education, English language learners, Title I reading. The plan also provides flexible classrooms at each building to reduce the likelihood of busing students out of their school boundary area when enrollment at a grade level exceeds the building’s capacity.

What will happen if the bond issue passes?

If the voters approve the referendum, the District will work toward completing the projects listed in the referendum question as the law requires.

What will happen if voters turn down the bond referendum?

If voters fail to approve a bond referendum, Iowa law dictates that another referendum that incorporates any portion of the defeated referendum cannot be brought to the public for vote for at least six months. The next special election date available to school districts at least six months after April 3, 2012 is Dec. 3, 2012.

How can we afford a bond issue now, at the same time the library and hospital are expanding?

The hospital expansion does not impact property tax rates because hospital revenues will fund the work. The estimated tax increase for the library is $.61 per $1,000 valuation. Because of a reduction in certain general fund levies, the estimated tax levy rate increase for a $55 million school bond referendum is $0 per $1,000 taxable valuation. Our total tax levy rate would rank the District 7th of 10 in Story County as shown in the chart below.

                Story County School Districts  -  School District Tax Rate

Ballard CSD $23.29802

Gilbert CSD 19.98282

North Polk CSD 19.85396

Roland-Story CSD 15.93439

Nevada CSD 15.61389

Collins-Maxwell CSD 14.87197

Ames CSD 14.51772

Colo-Nesco CSD 12.74979

West Marshall CSD 12.33229

United Community CSD 11.72302

Rate per $1,000 of Taxable Valuation (school district only)

For taxes payable September 2011 and March 2012

How was the decision made on $55,000,000 for the cost of the five elementary projects?

StruXture Architects, the consultant hired by the District to help develop a long-range facility plan, provided preliminary recommendations to the Board on May 23, 2011. The Board determined the sites for the elementary schools and whether to build or renovate, and then applied StruXture Architects’ estimated costs for new and renovated elementary school facilities. The report entitled “ACSD Site Study Schemes” is posted at the Ames Community School District website, www.ames.k12.ia.us under School Board, Facilities Documents, 5- 23-11.

If the referendum passes, how much will my property taxes increase and how will the debt be repaid?   (Information provided by Piper Jaffray Co.)

The District estimates that there will be no tax rate increase over fiscal year 2011-12’s tax rate as a result of the bond issue. The change from the prior election has to do with the District’s general fund levies. During school year 2009-10, the Governor ordered a 10 percent across the board cut to all state funded programs, which included school funding. The District’s cut was $2,001,607. However, since the District (and most schools in Iowa were in the same position) had already approved its budget and contracted for teachers and supplies etc, the District was unable to cut this amount of spending from that year’s budget. So, the District, like many of its peers, drew on its cash reserves to continue funding operations.  At the next available date, fiscal year 2010-11, the District increased a discretionary cash reserve levy to recoup the reserve level that had been expended as a result of the across the board cut.  The District rebuilt the balance over the fiscal years 2010-11 and 2011-12 to a level where, beginning school year 2012-13, the District did not need to continue the cash reserve levy.  Thus, the District is dropping this discretionary levy for fiscal year 2012-13. The drop in levy in the general fund will allow for an increase in the debt service fund, and the net result is that the overall level of taxation will not increase compared to fiscal year 2011-12’s tax rate.

The District has assumed that the $55 million would be sold in three bond issues in 2012, 2014 and 2015, at interest rates of 3.25 percent, 4.25 percent and 5.25 percent, respectively. Current market interest rates are around 3 percent for bonds similar to those discussed herein, so the district has intentionally overstated its expected interest cost in calculating the tax implications in an attempt to be exceedingly cautious. If the district is able to sell the bonds at lower rates, this reduction in interest cost will flow through to the voters in the form of lower overall tax levy associated with the bonds.

The district may use a combination of property taxes and School Infrastructure Local Option funding to repay the bonds and keep the tax rate at or near its current projected level. The bonds are ultimately secured by a property tax sufficient to retire all of the bonds, however, the district will consider using SILO revenues annually to reduce the tax levy associated with the bonds to meet the above goal. This consideration is not a binding commitment and not part of this ballot proposition, rather, a statement of intent by the current board. Future boards could choose to use the SILO tax in other ways, thus causing the tax rate to increase due to the fact that the SILO funds would no longer be available to be used to lower the tax levy associated with the bonds.

How will the sale of District property and the revenue affect my taxes?

The district will use revenue from the sale of property to lower the over-all cost of the general obligation bond. By law, school districts must use funds from the sale of property for building new or renovating existing properties.

Why did the Board choose the Fellows site over the Carver site?

The Board determined the current Fellows site to be suited for constructing a new school. The Board also learned and that the George Washington Carver property has the potential to provide a long-term benefit to the District in property tax revenue and additional students from the development of single-family homes.

Could the plan for the high school sports complexes, maintenance building, and administration facilities be changed after the referendum vote?

The April 2012 referendum will be for elementary buildings only. Decisions on the sports complexes, and maintenance and administration facilities will be parts of later phases of the Long-Range Master Plan.

If the referendum passes, what will happen to Edwards Elementary School?

The district will take the school out of service according to a project-phasing schedule that the Board will determine. The Board will determine whether to sell the property or reuse it for another district purpose.