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Frequently Asked Bond Issue Questions

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Lindley Hall was the facility for PE and other activities for Santa Fe Middle School students. This near 17,000 square foot building was constructed of brick and mortar. After decades of exposure to the elements, the mortar has deteriorated and a storm in the summer of 2021 resulted in bricks falling as the structure was compromised. At the advice of engineers, the building was deemed unsafe for use. Physical Education is a mandated part of all schools’ curriculum. Santa Fe Middle School students have been bussed to other locations for PE. This is inefficient and expensive operationally. Santa Fe Middle School needs spaces for PE and other activities. The building can again be structurally sound with repairs and improvements including upgrades for handicap access (ADA).

 Certain areas of Santa Fe Middle School also have similar challenges with exterior walls and water infiltration. As engineers have concluded that the damage at Santa Fe is not as severe, tuck-pointing and sealing of the brick and mortar exterior walls and decorative stone would prevent future water intrusion. A skylight also needs to be reconstructed and repaired to improve the exterior envelope for continued use and safety

A bond issue is a financial tool used by cities, counties, and school districts to finance major capital improvements. As this and most projects are considered public purpose, the district can borrow advantageously with tax-exempt financing. Kansas school finance limits local schools from accumulating the amount of money to address this size of project. Capital Outlay levy’s are limited to 8 mills and most of these dollars are needed for other annual repairs or replacement of equipment such as buses and technology.

 Improvements to both Lindley Hall and Santa Fe include structural repairs, ADA upgrades, exterior walls and roofing, interior lighting, HVAC, plumbing and paint. The proposed improvements at Lindley Hall are to reconstruct and repair walls affected by the storm that resulted in falling bricks. Santa Fe Middle School would also have improvements to the exterior envelope to lessen the chance of similar exterior challenges. Both buildings would have tuck-pointing to upgrade the mortar between bricks to abate wind and water intrusion. Lindley Hall would also have flexible spaces developed for technology and other educational programs within the budget. These improvements will make Lindley Hall usable again long term and lessen the chance of Santa Fe having similar problems in the future.

It is such a challenge to arrive at a consensus for needed improvements that it is rare to have the time to develop a contingency plan. To be fair and equitable to the students and staff at Santa Fe, PE space needs to be available at that site. The Board of Education believes it to be not an option, but a necessity. Plan B would be to finance these improvements in a different manner. A voted general obligation bond offers the most cost effective option with lowest interest cost and financing expense. A Lease Purchase transaction is a legal option, but the interest cost and costs of issuance would be higher, resulting in a larger local investment. Lease Purchase payments are not eligible for state aid as are general obligation bonds. As the Lease Purchase principal and interest payments would be an obligation of either the general fund of capital outlay fund, they would lessen monies available for other educational efforts. The general obligation bonds would be paid from a separate bond and interest levy that cannot be used for other purposes.

USD 373 has existing general obligation bonds outstanding from many years ago that are scheduled to be retired in 2026. The levy to meet the payments on these bonds in the current budget is 11.74 mills. Our bond consultants are confident in stating that conservative estimates as to tax base growth, state aid for bond payments, and today’s interest rates will result in the 11.74 mills to generate adequate tax revenues to pay the debt service on both the old bonds and the proposed new bonds with the same mill rate (11.74 mills) through 2026. After the old bonds are retired in 4 years, the mill levy will drop to an estimated 2.86 mills until the proposed new bonds are retired in 2037. Our old bonds are receiving state aid at a 59% ratio and the new bonds are eligible for 20% additional state aid. The interest rate for this bond issue is estimated at 4.5%, although similar issues today have been marketed closer to 3.5%.

 In many past periods, bond projects would advertise and hire a general contractor to build the project. In recent years, the concept of using a CMAR has become more cost-effective and popular for major public purpose projects. The CMAR is selected in competition and becomes a liaison between the District and sub-contractors for the project. They are experts at knowing the market and how to maximize a project with control of costs. Segments of the total project are bid separately rather than in one package to one entity. The competition makes the process more cost-effective. When retained early in the process, a CMAR firm can guarantee that a project will be constructed within the required budget, or the CMAR covers the overage. A CMAR firm works for a fixed percentage of the project cost and any savings is retained by the District.

In 2021 a consultant did a cursory review of Lindley Hall to determine if it could be repaired. Their assessment said it could be done and provided costs to repair the structure along with ADA upgrades.

In summer of 2022 the architecture and construction teams did an intrusive investigation and thorough review of the Lindley Hall structure. The board also asked for a review of the adjacent Sante Fe 5/6 Center. Costs were provided for the comprehensive needs of both facilities - these include structural repairs, ADA upgrades, exterior walls and roofing, interior lighting, HVAC, plumbing and paint. Other costs that were not included in the consultant estimate were equipment, technology, escalation (anticipated inflation) and contingencies - All of these costs have now been accounted for and included in the updated bond estimate.

If savings are recognized, all savings will be returned to the district.

The board of education tasked the architect and construction teams to review costs for a new similar gym, this cost came in much higher than renovating the existing Lindley Hall. The board then asked to price a new basic metal building gym, which was still more expensive than an extensive renovation of existing Lindley Hall.

All bond financial information, renderings and videos can be found on the district's bond information page.

Informational sessions were held on September 14 and 17 for the community to come and ask questions of the construction management company, architects and financial advisors. There is one final opportunity on October 27th at 6pm at The Porch (724 N. Main, Newton KS) to ask questions of the experts.

For further questions, contact Director of Communications Carly Stavola, or Superintendent Fred Van Ranken,

Thank you for your interest in correct information surrounding this general election ballot item. The general election is November 8th.