BY CHUCK VANDENBERG
FORT MADISON – Fort Madison School District voters will be asked to vote on measure to allow the district to borrow against state SAVE tax funds through 2051 on March 2.
At Monday’s regular Fort Madison School District Board of Directors meeting, the board voted 5-2 to place the measure in front of district voters in a special election.
The SAVE funds are collected on sales tax throughout the state as part of the Secure an Advanced Vision for Education tax, formerly known as the Local Options Sales Tax. Lee County voters approved the initial use of L.O.S.T. tax funds in August of 1999 with an effective date of Jan. 1, 2000.
That measure did not include an expiration date.
Board members Brian Steffensmeier and Brad Walker voted against the measure.
Both men said the supported a Revenue Purpose Statement at some point, but said the district hasn’t provided enough information yet to put it in front of voters.
Any district wanting to be able to borrow against anticipated revenues from the state-collected 1% sales tax after Jan. 1, 2031 has to approve the RPS prior to each district’s current RPS expiration or Jan. 1, 2031, whichever is sooner.
“I just need more information,” Steffensmeier said, explaining his vote after the meeting.
Walker said he thinks approving the RPS will be needed in the future, but said there just isn’t enough specifics on what the district will do with the money to put in front of voters.
“I just want more information. Looking more into that, why do we need to do borrow against something 11 years down the road when we don’t know what tomorrow will bring,” Walker said.
“I get it that you need to do this, but I’d like to see a plan for the future as to why we need it now. We’ll still have access to these funds years from now.”
Board President Diane Hope, presiding over her first meeting as newly elected president said the board needed to get it done and out of the way.
Walker called borrowing on the money for bigger projects the big “elephant in the room”, but Hope said there was no “elephant” in the room.
“Basically we’ve got two things – an RPS, and somewhere down the future we’ve got the Ad Hoc committee recommendation, and they’re will be some discussion and action on that – don’t know what it will be. But right now, the RPS – let’s move on this and get it behind us.”
The Ad Hoc committee is a group comprised of school, business, and community representatives taking a comprehensive look at district facilities.
District Business Manager Sandy Elmore said the move is a finance mechanism for future projects.
Fort Madison’s current RPS has no expiration on it, so the the Jan. 1, 2031 date is in effect. Extending the move will allow the district to borrow against the revenues expected from 2031 through 2050.
This is the same sales tax fund that the district borrowed from to build the new middle school. Those general obligation bonds were refinanced in 2019 and are set to be paid off in 2029.
If the RPS vote fails, the district will still have access to the funds, but according to Elmore, would not be able to borrow against them. A simple majority is required for passing by district voters.
The funds would still come to the district on a per pupil bases as they are now, but have to be spent according to state priorities, which don’t change whether the RPS is approved or not.
Those ordered priorities would be payment of bonds currently using SAVE revenue, reduction of bond levies and all other debt, reduction of regular and voted Physical Plant and Equipment Levies, reduction of public educational and recreational levies, any authorized infrastructure purpose, and other bond retirement.