Matt Gillespie of Piper Jaffray presented the Nevada School Board with options for consideration of future facility financing, specifically a possible middle school renovation that would occur five to six years from now.
The district currently has outstanding General Obligation (G.O.) Bonds from 2006 and 2012 for elementary and high school renovation projects. The 2006 bond is callable in 2016. Gillespie explained that the ability to pay this debt, or pay it down early (when it is callable in 2016) would do two things: 1) Save taxpayer money by paying off the loan early and forgoing years of interest payments, and 2) Create greater bonding capacity for future projects.
Presently, the overall school levy is made up of several individual levies, which include the General Fund Levy, Management Levy, Cash Reserve Levy, Instructional Support Levy, Physical Plant & Equipment Levy, and Debt Service Levy. At this time, the District is levying$2.04 in Debt Service. The District has the authority to levy $2.70 for Debt Service. By levying the full $2.70 in Debt Service, Gillespie indicated that the District would be in a better position to reduce current debt when the first G.O. Bond is callable in 2016. By levying the full $2.70 in debt service, however, the District must be willing to increase the overall school levy, or reduce one of the other individual levies.
If the District continues on as it is now, another G.O. bond in five to six years could generate approximately $8 million toward the estimated $13 million needed to renovate the middle school. Should the Board move the Debt Service Levy to $2.70, the same G.O. bond in five to six years could yield upwards of $13-14 million.
The board spent a big portion of Monday’s meeting gaining an understanding of this financial picture. The Nevada Journal plans to do an expanded story on this subject in an upcoming issue.