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Money talks

MIDDLE AMANA— For the first time in many meetings, the board’s discussion was not about growing enrollment, shrinking buildings, and what to do about them.
It’s budget time.
The board of directors for the Clear Creek Amana (CCA) school district continued their tour of the district’s buildings Wednesday, March 21, as Amana Elementary hosted the regular monthly work session and business meeting. Upon Superintendent Denise Schares’ recommendation, the board approved a total budget of $36,429,681. While the amount is higher than the re-estimated total for the current year of $32,741,931, the property tax levy will decrease from $15.74 to $15.51 per $1,000 of taxable valuation. District patrons outside of Amana will be levied at $15.31 per $1,000 of taxable valuation as they will not be liable for the $.20 assessment for the Amana Community Library located in the elementary school.
Two factors are responsible for the levy decrease: enrollment and taxable valuation in the district.
The district’s enrollment continues to grow with 1,576 students certified this fall, up from the 2011-2012 figure of 1,565. Only 62 students open-enrolled out of the district this year, down from nearly 85 last year. 233 students open-enrolled in, up from 222 last year. The district receives funds for the transfers in, and pays for the transfers out.
Taxable valuation increased in both Johnson and Iowa counties from the 2011-2012 fiscal year. In Johnson County, the 2011-2012 total was $384,437,636 and is at $429,357,599 for the 2012-2013 year. Factoring in Tax Increment Financing (TIF) valuations, the Johnson County figure increases to $731,415,104.
The budget is created in an extensive process that begins with a review of last year’s expenditures and an estimate of next year’s costs. As an example, the cost estimate for student transportation went up from $780,150 in the 2012 budget to $1,040,000 for 2012-2013. Once the proposed budget has been crafted, a public hearing is held prior to the formal vote to approve or reject. At Wednesday’s meeting, nobody from the public spoke for or against.
With the budget approved by the board, it will be certified with the state on April 15. Depending on what happens in the state legislature relating to school funding, the budget may be amended after its certification.
Board Secretary Lori Robertson, in presenting the budget, told the board the district is very fortunate in that it has cash and an unspent balance from last year.
“We try to manage it (unspent balance) at a constant level,” Robertson said, explaining it acts like a credit limit, and although it is not actual cash on-hand waiting to be spent, it is available if necessary.
Board member Rick Hergert made a motion to approve the budget as presented, seconded by Terry Davis. The motion passed unanimously.
The board also approved refinancing general obligation bonds first taken out in 1997 and re-issued in 2003. Matthew R. Gillaspie, investment banker and senior vice president of public finance services for Piper Jaffray and Co. was on hand to walk the board through the process.
“It’s just a refinancing, like refinancing your house,” Gillaspie said. However, unlike a mortgage, the interest rate is in constant flux and won’t be set until the April 18 bond sale date. He provided a set of estimates showing a reduction in the interest rate from 3.3 percent to 1 percent with the debt paid off in June of 2014 at a savings of over $58,000 to the district.
In the 2013 fiscal year, the debt service levy increases to approximately $3 to help manage the overall levy rate and to save additional dollars in interest. Taxpayers likely won’t notice the increase as their overall levy goes down as explained earlier.
Gillaspie also emphasized the bond in question is not the proposed bond for expanding North Bend Elementary or renovation and expansion work at the middle school, but is existing debt being restructured. Going back to the home mortgage example, he said what the board was doing would be akin to paying off a 30-year mortgage in 15-years through refinancing.
Piper Jaffray and Co. was also approved to continue as the district’s financial services provider.
In other action, the board approved a $170,000 contract with Shive Hattery for architectural and design services for the proposed addition at North Bend. 30 percent of the contract is to cover the costs of construction administration while the remaining 70 percent is for design work.