board facilities update and planning 120715.pdf

Facilities Planning

Sequim School District 323

December 7, 2015

Facilities Planning 12/07/15

• K-3 Class Size Reduction Facilities Grant

• School Construction Bond



– Authorized by 2ESSB 6080

– Passed during 2015 Legislative Session

– Intent is to assist districts add K-3 classrooms to meet funded class sizes in 2017-2018 (aka K-3 CSR)

– Allocates $200 million to fund construction of modular or permanent classrooms



– Requires application by district (completed on December 1)

– Application verified by WSU Energy Extension offices

– Requires a local match which must be dedicated by March 1, 2016



– Awards are formula based

Necessary Added Classrooms 7

times ((School Construction Assistance Program Matching Ratio) +

30.75%

(Free and Reduced Lunch Rate times 20%)) 46% x 20%

Times Modular or Permanent Construction Reimbursement Rate

Modular = $210,000Permanent=$615,083

Facilities Update Planning 12/07/15


– Initial eligibility indicates 7 “Necessary Added Classrooms”

– Permanent Construction Eligibility = $1,720,080

– Modular Construction Eligibility = $587,265

• Modular requires placement on permanent foundation

– Requires a local match which must be dedicated by March 1, 2016


• School Construction Assistance Program

– Also known as “state matching funds”

– District is eligible for $4.3 million in SCAP funds IF it tears down what is currently known as the Sequim Community School building

– Combined with K-3 Class Size Reduction Grant, district could receive total $6 million in construction assistance


• School Bond Proposal

• Three Concerns

– Projected Elementary Enrollment

– Construction Costs Escalation

– Interest Rates


Elementary Enrollment

Projected to Grow by 144 students by

2023


• School Construction Bond Proposal-Escalation– Escalation is the increase of construction costs due to

rising market demand for a limited supply of labor and materials.

– Chimacum, Port Townsend, Central Kitsap, South Kitsap all will have bond proposals on the February, 2016 ballot.

– Tacoma has yet to bid projects for its $500 million bond passed in 2014.

– BLRB Architects and ESD 112 Construction Services Group estimate escalation to range from 4% to 11% annually.

– Updated cost estimate for projects included in Nov 15 bond proposal includes escalation of $5 million.

KITSAP SUN 30 NOV 15

BELFAIR — The North Mason School District has selected the Berschauer Group in Olympia as the contractors to complete the remodel of the former North Mason High into the new Hawkins Middle School.

The school board voted Tuesday to move forward with the lowest bidder, at $15.8 million, after the district went out to bid for the second time. Previous bids came in at about 22 percent higher than the district’s plans for the remodel, estimated initially at about $14.7 million, said Eric Nelson, construction manager for the district.

“On the second go-round, we were much more pleased with the pricing and feedback,” Nelson told school board members. “We knew we had to take a look at our project (after the first bid). The school will still be very nice and have a lot of the same bells and whistles.” After the first round of bids, district administrators had to decide whether to wait and hope prices would go down or move forward with a less expensive design, Nelson said.

“A 1 to 2 percent increase year to year is to be expected, but now … construction companies in the Pacific Northwest are at full capacity and prices could go anywhere, sometimes up to 10 to 15 percent,” he said. “We made the assumption that it’s only going to get worse.”

Nelson and his team, including architect Ray Mow of Erickson McGovern, made what they consider minor adjustments to bring down the price of the project. “The space plan didn’t change much, it’s still the same number of classrooms and everything,” he said. “It’s the stuff you can’t see, different things with mechanical and electrical systems. There was a lot of work redefining the site work outside of the building.”


Project Name Current ProposalNovember 2015

Proposal

GWE-4 Classrooms, Gym $7,020,917 $6,441,557

New Elementary $26,509,611 $26,285,051

Locate New Elementary East $2,000,000 $2,000,000

SHS H Building Science Classrooms, PAC Band and Choir Rooms

$10,369,408 $9,258,340

Demolish Community School $746,216 $666,264

Reconfigure SHS B Building $1,956,192 $1,746,660

Remodel HHE D and A for Community School Uses $2,083,262 $1,097,884

Remodel District Kitchen $2,385,600 $2,130,000

Remodel SCS for Warehouse and Maintenance Shop $928,794 $829,280

Projects Total $54,000,000 $49,265,036

• Current bond interest rate projections are 4.72% to 5.15%• Feb 2014 Bond Proposal Interest Rates were 3.47% to 5.11%


Current Proposal as PresentedTax Rates per $1,000 of

Assessed Valuation

Projects Total $54,000,000

Estimated 2017 Debt Service Fund Levy Rate $0.67

Estimated 2017 Educational Programs & Operations Levy Rate

$1.49

Est 2017 EP&O and DSF Levy Rate Total $2.16

November 2015 Bond ProposalTax Rates per $1,000 of

Assessed Valuation

Projects Total $49,300,000

Estimated 2016 Debt Service Fund Levy Rate $0.59

Estimated 2016 Educational Programs & Operations Levy Rate

$1.52

Estimated 2016 EP&O and DSF Levy Rate Total $2.11

VS.


February 2016 Election

November 2016 Election

Difference

Bond Amount $54 million $59 million +$5 million

First Year Tax Collection Rate

$0.61 per $1,000/AV $0.67 per $1,000/AV+$0.06 per $1,000

/AV

Total Interest Costs $40.8 million $44.8 million +$4 million

What If We Wait a Year?

$0.94

$2.30

$2.15

$1.60

$-

$0.50

$1.00

$1.50

$2.00

$2.50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Co

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$1

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0 o

f A

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Sequim School District Total Local Levy History 2000-2015

15 Year Levy History


• Disposition of Bond Funds

• Must be stated in authorizing resolution

• Three options– Projects listed in resolution

– Defeasance (buy back bonds, prior or current)

– Direct to other projects (requires public hearing)

– At completion of 1996 bond projects, excess funds were used to defease bonds ($300,000)

– District refunded (refinanced) outstanding bonds in 2008 saving taxpayers $280,000


• Senior Property Tax Exemption– Exemption from the local schools portion of

property tax• EP&O Levy

• Debt Service Fund Levy (repays bonded indebtedness

• Capital Projects Fund Levy

– Must have combined household income of less than $40,000 per year

– Applicant must be 61 years of age or greater

– Requires application

Urgencies and Visions= Current Elementary School Location

= Current Elementary Attendance Boundary


• Timing

Election Date Resolution Due By

February 9, 2016 December 11, 2015

April 26, 2016 February 26, 2016

August 2, 2016 May 13, 2016

November 8, 2016 August 2, 2016

February 14, 2017 December 16, 2016

April 25, 2017 February 24, 2016

August 1, 2017 May 12, 2016

November 7, 2017 August 1, 2016

• Current EP&O Levy expires at the end of 2017• Election must occur in 2017 if it is to be renewed


• Form of Request

Capital Projects Fund Levy

Bond

Duration One to Six Years Generally 20-25 Years

Voters Vote OnTotal Amount to Be Collected Each Year

Repayment of Bonds

Passage Requirements 50% + 1 60% Plus Certification

Allowed UseBuildings, FF&E,

Remodeling, Technology

Same as CPF Levy

Resource AvailabilityAs Property Taxes Are

CollectedWhen Bonds are Sold


• Summary– District has applied for K-3 Class Size Reduction Facilities Grant

Funding– State Construction Assistance Program matching funds are

available– Elementary enrollments are anticipated to continue to increase– Construction costs are rising and will continue to do so– Indicators point to rising interest rates– District proposal is cost competitive when compared on a wide

range of scales– District has a track record of conservative financial management

(defeasance, refunding, projects within budget)


Thank You!Questions?• Brian Lewis, Director of

Business Services• 360-582-3266• [email protected]

board facilities update and planning 120715.pdf

Documents

construction of modular

facilities update planning

construction manager

school bond proposal

class size reduction

school board

north mason school district

increase of construction