Voted PPEL isn’t a bond consolation prize

The Fort Madison Community School District is putting another referendum in front of district tax payers on March 3.

The move, called a Voted Physical Plant and Equipment Levy (PPEL), is geared toward upgrades to district buildings that not only include the elementary schools, but also the high school.

The district doesn’t currently assess the voted PPEL, although there is a 33-cent PPEL levy including in the district’s annual tax levy that generates close to $250,000 annually.

According to district Business Manager Sandy Elmore, that money is basically used to fund transportation maintenance and bus purchases, without much left over.

This would allow the district to tax up to $1.34/$1,000 of assessed valuation as part of that PPEL fund levy. However, district officials have indicated, as well as stated on their website, that current formulas show there won’t be an increase to the property tax rate with the passage of the referendum.

“Under this model we are projecting under 2021, if you implement a voted PPEL of $1.34 our property tax rate would be 12.8442, so two cents lower basically,” Elmore said at a workshop in January.

In 2023, she said the rate looks to be $12.42, in 2024 it would fall to $12.12, and in 2025 the district’s solvency ratio drops a bit, so additional cash reserves would be implemented to raise the levy to $12.48.

“So really we’re saying no impact for at least five of the years,” Elmore said at the workshop.

Plans for the additional money include improving security entrances at Richardson and Lincoln, completing phase 3 of the air conditioning upgrades at the high school, and recoating the Lincoln roof, according to the district website.

The first two projects would account for two years worth of the additional PPEL money if authorized by voters March 3 with a 50% +1 approval. The 60% supermajority required for general obligation bonds isn’t required on the Voted PPEL.

Superintendent Dr. Erin Slater said she doesn’t consider the Voted PPEL referendum any sort of “consolation prize” for the failed attempts at general obligation bond referendums.

When figuring in repairs to the high school, which is planned to start this summer, it would seem that the move is not associated the failed previous vote, but moreso to beef up maintenance and repair coffers.

One of the arguments made by voters during the failed referendums was that the district wasn’t keeping up with maintenance at the buildings.

The district is also currently partnered with Estes Group and getting a full facility assessment. Those results could change how remaining year’s PPEL funds could be used.

The district can also technically borrow against the increased PPEL levy, which is projected to generate close to $1 million annually or $10 million over the 10-year life of the referendum.

But Elmore said not enough projects have been identified at this time to borrow against the full amount.

The district may also, in the near future, be able to access funds through the state’s SAVE penny tax to again look at constructing a new facility on the junior high campus. It’s an option. But there are some hurdles to clear there. The expenditure of construction funds wouldn’t require a vote, but a revenue purpose statement to trigger additional SAVE bonding would require a simple majority vote.

Board President Tim Wondra said he understands that if the PPEL isn’t passed then the district would be faced with either not doing maintenance upgrades or paying for needed projects from the general fund, which he said could result in staff reductions.

Here’s the perfect scenario as we see it. We help beef up the district’s maintenance budget to get the a/c fixed at the high school and secure our elementary schools, among other things.

Then, in the near future, we look at possibly paying off the 20-year bond for the middle school, and pass a revenue purpose statement to allow us to utilize the extended SAVE tax money to build a new elementary. The only cost to tax payers would then be the extra $1.01 on the PPEL, which won’t be realized according to school officials, and the 1% of sales tax on things everyone in the state is buying.

Sounds good to us.

Hey, we’ve been watching FCC activity surrounding rural broadband funding and some interesting things have popped up including some providers getting whacked for not living up to the deal with federal grant money to extend coverage into rural areas. Google it. Oh…and Apple just got popped $25 million in France for allegedly tapping the breaks on iPhones through IOS version updates… about two years from the date of purchase. That’s a drop in the bucket for Apple, and I’m sure they’ll ‘a-peel’…

But that’s Beside the Point.

Chuck Vandenberg is the editor/owner of the Pen City Current and can be reached at editor@pencitycurrent.com


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