The Nevada School District has been in one phase or another of major building construction and remodeling for most of the past eight years. It started in 2005 with demolition of the oldest parts of the elementary building – the 1955 portion and the three-story 1916 junior high portion - and has led to the final phase of the high school renovation project that is going on now.
In the words of School Board President Marty Chitty at the Oct. 14 school board meeting, “I think the community is getting a bit fatigued as far as us building anything.”
But Chitty and other board members know that they are facing one more major improvement project, and at their meeting Oct. 14, they began to talk about how best to plan, especially with finances, for necessary updates to the Nevada Middle School, which opened in July of 1991, making it 22-and-a-half years old.
The good news, for those who are tired of projects, is that the middle school improvements are being planned for five years down the road. But as those who’ve paid attention during the elementary project and the high school project know, you want to start getting your ducks in a row as early as possible.
“With this middle school project in the back of our minds, we want to consider, ‘How do we put ourselves in position to finance that, and at the same time, how do we also cover our immediate needs,’” said Superintendent Steve Gray. He believes the district should consider the timeline “a luxury,” because with a five-year window, “we have time to consider the most financially prudent strategies to best meet our needs.”
Matt Gillespie of Piper Jaffray came to the board’s most recent meeting to educate board members about the district’s current financial situation and to provide some advice for how the district might put itself in the best financial shape for the eventual middle school project.
The district has outstanding General Obligation (G.O.) bonds from 2006 and 2012, from the elementary and high school projects.
The 2006 bond is callable in 2016, and Gillespie explained that the ability to pay off this debt, or to pay it down early, would help the district in two ways:
1) Saving taxpayer money by forgoing years of interest payments;
2) Creating greater bonding capacity for future projects.
Gray, who is new to the Nevada District this year, is impressed with how Nevada has handled its finances in the past. He notes, “We just went through the worst four years in the history of Iowa school funding, and Nevada has come out ahead, with a positive balance, so we’ve done really good.”
In many cases, Nevada has taken a conservative approach and been able to lower its overall levy. Nevada presently has an overall levy rate of $15.71 per $1,000 of valuation.
But Gray, who said he’s met with nearly every school employee or a representative of each department in the school during his first few months in Nevada, said he has pages and pages of needs that staff members have expressed. They have seen many cuts through the past few years and are indicating that there are real needs in many areas, he said.
“I don’t know if we can continue to best serve our kids at the current levy rate. It’s got to be about meeting the needs of kids. Allocating our resources in the most efficient and effective ways is always the balancing act in front of us.”
Part of meeting the needs of kids is to have all the school’s facilities in the best operational shape; and the middle school is clearly not where it needs to be.
At the top of the list of needed middle school improvements is the heating and cooling system. Ron Clatt, head of middle school maintenance, said the middle school heating and cooling system is run off pumps that are connected to each classroom. Those pumps, he explained, are connected to a compressor that’s hooked to a water line. In cooler weather, boilers put heat into the water and in the summer time, a chilling tower is used to cool the lines.
“The chiller is 22 years old and has a life expectancy of 20 years. At last I heard, it was a good $20,000 just to replace the coiler part, which is the top half of it,” Clatt said.
Of the nearly 50 air units in the middle school building, four have had to be replaced because they were corroded out beyond being fixable. Since all of them were installed at the same time, Clatt said you never know when another one will go bad.
The middle school roof has also had its share of problems and leaks. Clatt said, while he doesn’t fully understand all the problems with the roof, many of the problems have to do with the rubber sheet that covers the roof having tightened and pulled away at the edges, as well as that sheet suffering from wear and tear in various places.
Clatt also mentions electrical problems in the middle school building. The electrical system, he said, is quite low to accommodate all the present computer systems and other things in the building. “If somebody blows a breaker in their room, more than likely they’ve taken half of another room with them.”
Gray said there are additional concerns about the middle school entryways, as doors and door frames have been rusting out and need work. And he’s concerned about the entryways of the building when it comes to security issues. Because of the unique building configuration, office staff has no way to see who enters the building. And the position of the gym, Gray said, makes it hard to isolate that part of the building for public events.
A good problem for the district, Gray said, is an increase in enrollment by 45 students this school year. This increase is mostly at the elementary level. “We have room right now, at the middle school,” he said, “but we need to be prepared should that (increased enrollment) trend continue.”
At this time, there is no talk of adding onto the middle school building. The work of adding geothermal heating and cooling (like the district has at the elementary and high school), repairing/replacing the roof, upgrading electrical in the building and making other improvements, is projected to cost $13.8 million in 2019.
If the school district were to do nothing different, and were to keep paying on its current debt as it has been, Gillespie said another G.O. bond in six years could generate approximately $8 million toward this middle school project. But, the board has the ability to generate more revenue to prepare for this project.
Of the present overall levy, $2.04 is currently going toward Debt Service. The board has the authority to put $2.70 toward debt service. By levying the full amount for debt service, Gillespie said the district would be in a better position to reduce current debt when the first G.O. Bond is callable in 2016. Reducing that debt means making more funds available for projects.
To increase the debt service levy, the board either needs to increase the overall school levy or redirect how much of the present levy is going into the other levy accounts.
Gray said the district can’t afford to take awa from some accounts that it levies into, but it could make changes in the Management Levy or the Cash Reserve Levy. But, he said, you must take caution in making those changes. “You have to make sure you have enough in the Management Fund to cover expenses for insurance costs. And with the Cash Reserve, you’ve got to be sure you have enough cash on hand to pay your bills.”
School budgets must be certified in April, and as the Nevada School Board continues to look five years into the future, Gray said he expects there to be a lot more discussion about how the district can set itself up best for the next five years, as well as how can the district assure that it can pay for all of its current needs.
Just like a homeowner, Gray said the district has been catching up with major renovations that must happen when a home or building reach a certain age. But at some point, he said, even though there will always be maintenance types of things to take care of, “I think once the middle school (major improvement project) is done, this district will be in good shape in terms of major facility improvements.”
Every year, for a number of years, the district has budgeted for ongoing repairs and issues at the middle school, especially with its heating and cooling system. “We continue to apply first aid to a system that is beginning to fail us,” Gray said.
He hopes that the public will understand that the district wants to get all of its buildings in the best operational shape possible. He also hopes the public will understand that the board, even if it must raise the overall levy, would do so in the hopes of helping the district cover its debts more efficiently and take care of its present needs.
He wants members of the public to contact him if they have questions, concerns or comments. Talking with residents, Gray said, “goes with the territory. That’s part of my job to be a public servant, and I take that seriously.”