School board members discussed the possibility of taking out a second-lien bond issue of $9.75 million for the completion of the new Pea Ridge High School during a workshop that took place before and after the school board meeting on July 15.
The workshop was solely informative and no decisions will be made about whether or not to begin the process of a bond issue until the August School Board meeting, according to school superintendent Rick Neal.
The presentation included information about the history of the district's funding and millage elections, the history of the high school project and other construction projects, and growth statistics.
The 140,000-square-foot Pea Ridge High School is currently under construction and is expected to be complete in June 2020. The project is already 75 percent funded, Neal said.
"We feel like we have done an unbelievable job of preparing our school district in being able to pay for this and being able to fund it," Neal said. "So we want to show you how we are going to fund it. ... We have got to make sure folks know that we can fund this, we can do this and prepare for the future."
After using value engineering to bring costs down, the new facility has a guaranteed maximum price (GMP) of $23.67 million for the building scope of work and a total of GMP to $25.29 million.
However, the district has approximately $2.5 million of additional costs outside the GMP, which includes a list of 20 items such as furniture, sound systems, low voltage networking, kitchen equipment, fire and security alarms, and scoreboards.
By separating the expenses from the GMP and bidding them out independently, the district was able to save more than $300,000, according to Kevin Ramey, athletic director and federal programs coordinator.
The project also has an architect fee of $1.5 million and a land purchase cost of $565,000, bringing the total cost of the new high school to $29.88 million, according to the presentation.
Currently the high school is being funded $9.73 million from the 2018 millage increase and $10.66 million from partnership funding from the state. The bond issue would add the $9.5 million needed to bring the funding equal to the total costs, Neal said.
If the proposed bond is issued, the annual payments are estimated to be $530,000. The district will mainly pay for the cost through increases in assessed property valuation and growth of the community, according to Keith Martin, assistant superintendent.
The recently released increase in property valuation will bring in an estimated $370,000 annually in increased property tax revenue. The district also plans to cover the cost using savings incurred from the voluntary severance plan of $175,000 annually and the refinancing of other bonds for a savings of $40,000 annually, Martin said.
The district is also planning to put aside a minimum $25,000 annually to fund future projects in order to maximize future partnership funding, Martin said.
The school district waited until July to have the workshop to make sure that all costs are encompassed, Neal said. If the second-lien bond issue is approved in August, it will go before the state School Board in August and be finalized in January, he said.
The slides presented during the workshop are available on the school website, www.pearidgek12.com.
General News on 07/24/2019