With details of the Grandview Heights City School District's options for its facilities revealed to the public, leaders now are considering the potential financial impact of each one.
The set of potential options Superintendent Andy Culp presented at a May 1 community engagement meeting included repairing and renovating all three school buildings; repairing and renovating Stevenson Elementary School and exploring options for a new 4-12 campus; and creating a new K-12 campus.
The estimated costs for the projects ranged from $30 million to $35 million for moderate repairs and renovations at each school to $65 million to $70 million to build a new K-12 campus at the current site of the high school and Edison Intermediate/Larson Middle School.
The least-expensive option is the only one among the three options and several suboptions Culp reviewed that is below the district's current established maximum bond-borrowing capacity.
Grandview's current bond-borrowing capacity is $45.3 million, Treasurer Beth Collier said.
That amount represents the maximum the district could borrow for a facilities project, Collier said.
"State law provides a formula to determine how much debt a school district could issue," she said. "We can't just issue a bond debt of any amount."
The formula is based on several factors, most notably the assessed property valuation in a school district, Collier said.
"We're in the middle of a reassessment of property valuation right now, so I would expect our bond capacity will increase," she said.
A school district does have ways to obtain the funding needed for a project above its bond-borrowing capacity, Collier said.
"One way is through exploring partnerships to see if there are ways to raise private funds to help pay for a project," she said.
A district also can borrow funds against a future revenue stream, Collier said. Most districts who take this tack use funds from another levy.
Grandview has a permanent-improvement levy, but it provides only about $540,000 each year, with half of that money going toward technology upgrades.
"Even if we did a project that involved new buildings, that amount would probably be needed to cover the routine maintenance" of district facilities, Collier said.
2018 ballot logjam?
The goal of the facilities planning process is to come up with a community-supported way to address $44 million in deferred maintenance across the district, Culp said.
Culp expects to make a facilities recommendation to the school board at its Sept. 19 meeting.
Any potential ballot issue to fund the projects would stay off the ballot until November 2018.
It is possible the district will need to place an operating levy on that ballot as well, Collier said.
"Nothing has been decided yet about that, but it is a possibility," she said.
The operating levy likely would not work as a source of additional funding for a potential facilities project, Collier said.
"We try to make each of our operating levies last at least three or four years," she said. "Our last operating levy was approved in November 2014.
"Operating levies are strictly to provide funds for the operation of the school district," Collier said. "You try to make it as small as possible and still maintain your program at the same level. There's no extra frills to an operating levy."
Collier has compiled what she called "ballpark figures" regarding a potential facilities bond issue and its financial impact on taxpayers.
"These are just some general numbers," she said. "They are not etched in stone and should not be relied on as what the actual numbers would be."
If the district were to pursue a project costing its current bond-borrowing capacity of $45.3 million, an 8.2-mill bond levy would be needed, Collier said. It would cost taxpayers $288.42 annually for every $100,000 in assessed property value.
A 2.9-mill bond levy approved in 1996 to build an addition onto Edison Intermediate/Larson Middle School will expire at the end of 2019, she said.
The 1996 measure is now being collected at 2.5 mills due to Ohio's homestead and rollback reductions, Collier said. The 2.5 mills cost taxpayers $88.81 per $100,000 in assessed value.
"If you apply that 2.5 mills to an 8.2-mill levy, it would mean that the new levy would in essence be for about 5.7 in new millage," she said. "The amount of new payments for each $100,000 of value would be about $199."
One of the questions asked at the May 1 meeting focused on the revenue the district receives from Grandview Yard.
"That's probably the most common question Andy and I get asked," Collier said. "Some people might expect that revenue from Grandview Yard could help pay for a facilities project."
The district will collect $350,000 in new revenue from the Yard in 2017, she said.
"We do get about $572,000 in hold-harmless payments through (tax-increment financing), but that is only to make up for the revenue we were receiving from the property at the Yard before the warehouses and other buildings were demolished," Collier said. "It's really old money, not new revenue."
The amount of new revenue will slowly increase so that in 2040 -- the last year of the TIF agreement -- the district will take in about $1.2 million each year in new revenue from the Yard, she said.
The district has lost more money -- about $1.4 million -- in state funding over the last two years, after Ohio eliminated the tangible personal property tax, than it will collect in new revenue from the Yard by 2040, Collier said.