Voters in the Decatur school district might be asked to approve a bond issue next spring.
Decatur ISD Superintendent Rod Townsend gave a presentation to the board at Monday’s meeting outlining the district’s most pressing needs.
Under transportation, Townsend listed the need for about 25 buses at an estimated cost of $2.5 million – about $250,000 a year moving forward.
After several years in a row of budget tightening, with revenues and expenditures running about even, the money just isn’t there, board president Kevin Haney explained.
“With the buses, we’ve reached the end of their useful life, and we have to start putting more money into them,” he said. “That’s probably the most pressing thing is the age of our bus fleet. If we don’t have enough money rolling in to the general fund to pay the cost of those, we have to look into either raising the M&O rate or issuing bonds and raising the I&S rate to pay for that.”
The M&O, or maintenance and operations, tax rate is used to fund the day-to-day operations of the district. Because Decatur ISD is considered a property wealthy, or Chapter 41, district, funds put into this part of the budget are subject to recapture.
The I&S, or interest and sinking, portion of the tax rate is used to pay off debt. These funds are not subject to recapture by the state.
Townsend explained how raising the rate on either side would work when applied to the current year’s budget.
“If you do a TRE, tax ratification election, and you get a five-cent increase, you put it on M&O side, and you are going to generate some money,” he said. “It’s going to be about a million dollar increase, but you are going to end up paying about $491,000 of that back to the state. You’ll only be able to keep about $630,000 of it.
“If you take that same nickel and add it to the I&S side, it will raise about $1.9 million and you get to keep all of it.”
To increase the I&S tax rate would require a bond election.
Buses were one of several items “we feel we need but are going to be hard to pay for out of regular fund balance,” Townsend said. Other items include security upgrades at the middle school and high school. The high school upgrades could be quite expensive, Townsend warned.
“There’s about 44 exterior doors that at any point in time every one of them are open,” he said. “To go in there and put automatic locks and card swipe systems and then have a plan in place for students to come and go throughout the day, we will have to have some designated entry and exit points to be able to do that. It will be expensive, but how do you put a price on security if it keeps our kids safe?”
The security upgrades will also require technology upgrades, primarily in infrastructure.
Repairs to some of the older facilities in the district are another need. Townsend specifically mentioned air conditioning at the support services building and an old roof at the middle school that need to be addressed.
Because discussions are still in the early stages, a firm price for all the needs is not known, but Townsend presented an estimate of $10 million to give the board an idea of how much a bond issue might cost.
Using that figure, with a 12-year payout, the board would need to increase the I&S tax rate five cents to pay for the bond issue. Townsend pointed out a couple of times during the discussion that the board decreased the tax rate by a penny for the 2014-2015 school year.
With an average home worth around $117,000 in the district, taxpayers would see an average increase of $51.29 a year.
The next available election date would be May 9, meaning the board has until Feb. 27, 2015, to decide if it wants to call for a vote.
“I don’t think we have any choice,” board member Wade Watson said. “Unless everyone wants to start volunteering to bring every kid to school, we’ve got to have buses.”
Townsend said he could have more specific price estimates by the next school board meeting.