New school would require 16-cent increase in district's levy

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April 2 referendum set to approve building new PreK-3rd grade school on Bluff Road campus

BY CHUCK VANDENBERG
PCC EDITOR

FORT MADISON - Just two weeks ago, Fort Madison school board officials were looking at a .30 increase in its annual property tax levy rate that would include costs of building a new elementary school. But favorable data from the state of Iowa has cut that increase in half.

According to Fort Madison Community School District Business Manager Sandy Elmore, the district is currently looking at a levy of $14.60 per $1,000 of taxable value for the next fiscal year. The district's current levy is $14.44/$1,000 and the extra 16 cents would be enough to pay for the proposed new PreK-3rd grade elementary school if approved by voters next month.

The district has set a bond election date for April 2 for district voters to vote on the $30 million new facility on property the district already owns south of Bluff Road near 48th Street in Fort Madison.

Construction costs on the building hover near $24.2 million, while site preparation and furnishings make up the additional $5.8 million.

"Once we received the revised budget file from the Department of Management with the impacts related to what the Governor signed and the new income numbers from the DOM as well, the estimated tax rate impact with the bond included is $0.16 cents per $1,000 EAV (equalized assessed valuation)," Elmore wrote in an email Friday.

"The current year, FY18-19 rate is $14.44 per $1,000 EAV. Our new estimated rate is $14.60 with a debt service levy rate of $2.70 per $1,000."

Residential homes in the district have a taxable value of about 55% of their assessed value, due to a 2013 state mandated rollback and homestead credits. So someone with a home assessed at $100,000 would pay tax on approximately $55,000 each year.

If the April 2 bond passes, the person with a $100,000 home would pay $8.33/year toward the construction of the new building. Agriculture land is estimated at just 18 cents per year per $2,000 in assessed land value.

If the bond were not to be approved, the $2.70 debt service levy would not be included in the levy, however the district is still weighing its options on issues such as cash reserves and other funding that could impact the levy incrementally.

The district's budget won't be approved until after the bond election is held, so where the district's levy will be when the budget is certified in April is still unknown, unless the bond passes.

Elmore said the district levy rate could go down if the bond is not passed, but she cautioned taxpayers that, due to the increased valuation of the county, tax bills could go up despite the lower rates, because many properties in the county have increased in valuation.

She said the district's levy rate is a compilation of formulas and funds, and isn't set by county valuations. The formula is set by the state's cost per pupil and this year Iowa allowed that value to be set 2.06% higher than last year.

The district can tax based on that formula and other fund demands such as PPEL (Physical Plant and Equipment Fund) funds, debt service, and others. The levy rate is a compilation of the needs of those district funds.

The debt service levy is the portion of the levy that goes to pay the bonds each year that the bond is financed, typically 20 years. However, depending on market rates, the district could potentially refinance the bonds at a lower rate after a predetermined amount of time, typically 10 years minimum.

The district is currently in the process of refinancing bonds on the six year old Fort Madison Middle School at a potential savings of $1.3 million over the next 10 years.

The FMMS building was constructed without using property tax dollars and was paid for out of the state's 1-cent SAVE fund. District voters approved being part of the SAVE program in August of 1999. The program, once approved by voters, allows districts to bond against those revenues for projects such as the construction of new schools.

SAVE funds come from 1 percent of the state's 6 percent sales, services, and use tax. The Local Option Sales Tax that is used to calculate funds distributed to cities and counties is the extra 1 percent of the 7 percent paid on qualified purchases.

New plans for the elementary school include addressing traffic concerns with dedicated bus lanes and traffic lanes for increased efficiency and safety, with expanded and segregated drop offs for PreK, K-3, 4th and 5th grade, 6th grade, and 7th and 8th grade drop offs planned.

Plans also include a K-5 shared playground, and a dedicated PreK play area. New athletic fields have been dropped from the plans, but Superintendent Dr. Erin Slater said there is still room to move the fields to the campus if there was support for that move at a later date.

As part of the April 2 election, two Fort Madison School board seats will be up for election. The board seats currently held by Josh Wykert and Brian Steffensmeier will be on the ballot.

Wykert was appointed by the board earlier this year to fill Gayla Young's spot. Gayla died from health complications on Jan. 1. Steffensmeier was appointed to replace Jillian Troxel whose family moved to Wisconsin last year.

Elmore said Friday she had not received any board candidate filings. The deadline to file to run is March 8 at 5 p.m.

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