School board receives overview of bond issues

The USD 333 Concordia Board of Education met Monday, January 14th with Greg Vahrenberg with Raymond James & Associates, a full-service securities firm, who presented the board with an overview of school bond issues in Kansas.
Vahrenberg, who has worked with USD 333 Concordia for the past decade, has 27 years of experience in working with cities, counties, school districts, community colleges, hospitals and other issuers of bonds in Kansas. During the past decade, he has completed 805 bond issues totaling $8.9 billion.
School districts in Kansas can issue General Obligation Bonds to finance new construction or improvement projects. In recent months, the USD 333 Concordia Board of Education has been reviewing possible school improvement concepts and cost estimates for a prospective bond election.
In December 2018, Mike Mayo, Principal Architect with Ebert Mayo Design Group Architects & Planning Consultants of Manhattan, who the district contracted with in 2017 to provide consulting services for facilities planning, presented the board with updated construction cost estimates for Concordia Junior/Senior High School, Concordia Elementary School, and the former Concordia Middle School, now the USD 333 Service Center at 1001 E. 7th Street in Concordia. The projected total improvement costs presented amounted to $34.4 million, revised down from $41.9 million as originally presented the month prior.
Vahrenberg said school districts in Kansas may call a bond election by adopting a resolution, submitting the required applications and publishing the required notices.
He noted school districts in Kansas have the flexibility of conducting either a special election or placing a ballot question on a scheduled general election. Furthermore, school bond elections can be conducted by either a mail ballot or a traditional walk-in ballot.
"I always say, 'Don't rush the process of getting the project.' Think through the options for the project, then figure out what election date works best to present it to the voters," Vahrenberg said.
School districts are limited to one special election during a calendar year.
School districts calling a bond election may be required to submit an application to the State Board of Education requesting permission to conduct a bond election, requesting an allocation under the Bond Election Cap or requesting approval for state aid.
In recent years, the amount of school bond elections occurring during a fiscal year is limited by statue to the amount of existing bonds being paid in the prior year, plus an increase equal to the Producer Price Index (PPI).
School districts are currently required to receive an allocation under the Bond Election Cap in order to conduct a bond election. Applications can be received on July 1st or any date thereafter during the fiscal year. Allocations are granted in the order of receipt by the Kansas State Department of Education.
"If you are thinking about a project, and you are thinking about presenting it to voters, keeping that Bond Election Cap process in mind becomes pretty critical in terms of when you might be able to present that ballot question to voters," Vahrenberg shared.
The State Board of Education currently has two applications on the agenda which, if approved, would result in the remaining cap for the 2018-2019 fiscal year being $2.9 million. At the end of this month, USD 202 Turner in Kansas City has an election for $44 million against the cap, and USD 389 Eureka has an election for just under $5 million against the cap.
Vahrenberg said the estimated Bond Election Cap for the 2019-2020 fiscal year is anticipated to be $376 million, plus the 5-year PPI. The PPI index this year was 11%.
"This (Bond Election) Cap is in place for five years. We're currently in the second year of the cap. And it has caused a lot of school districts I work with to think, 'When will we be ready for deciding on what project is appropriate, and how does that tie into the filing deadlines,'" Vahrenberg offered. "And if we aren't ready until the fall, and all of a sudden we make a decision that we know the project we want to present, and then you turn to the state and find out the cap is all gone, that can create a real timing challenge from that perspective."
In accordance with 2016 Senate Bill 323, any school district that is eligible and desires to receive capital improvement state aid (bond & interest) must apply to the Kansas State Board of Education. The State Board of Education will consider certain criteria in determining the eligibility for such state aid. Kansas law provides a cap on the total amount of capital improvement state aid available for elections. This cap cannot exceed a six-year rolling average amount for capital improvement state aid.
"I really do believe that not rushing the decision-making process on what's the right improvement package to present to the voters is probably the most important step in getting bond approval from your voters," Vahrenberg said.
The USD 333 Concordia Board of Education voted Monday to publish notice of their intent to use an alternative delivery method for construction services using the Construction Manager at Risk (CMAR) delivery method for district needs assessment and possible future projects. A formal hearing will be held Monday, February 11 at 6 p.m.
CMAR is a delivery method which entails a commitment by the Construction Manager to deliver the project within a Guaranteed Maximum Price (GMP), which is based on the construction documents and specifications at the time of the GMP plus any reasonably inferred items or tasks. The CMAR provides professional services and acts as a consultant to the district in the design development and construction phases.
In addition to acting in the district's interest, the CMAR must manage and control construction costs to not exceed the GMP because contractually any costs exceeding the GMP that are not change orders are the financial liability of the CMAR.
USD 333 Concordia Superintendent Quentin Breese says this delivery method has several unique benefits, including taking the burden off of the district in managing and coordinating the project. The CMAR's main purpose is not to construct the project, but to manage the construction of the project.
"We don't want to ask for a construction manager and try to bid it out and have them quote us a number when we don't even know what we're getting into yet," Breese said. "This is an alternative method used by school districts and other municipalities that can follow the legal guidelines we have to to meet state regulations and national regulations, but also give us the flexibility to move around through our planning process so they can give us some added data and some added value to what we're looking at."
Following a 15-minute executive session for non-elected personnel, the board voted to approve the retirement of Concordia Junior/Senior High School Science teacher Denise Stover, effective June 1, 2019.
The board also voted to accept the resignation of Margaret Clark, Concordia Elementary School 4th grade teacher. And they approved the hire of Melissa Hyman an an Itinerant Early Childhood Education for the Learning Cooperative of North Central Kansas for the remainder of the 2018-2019 school year only.
The board authorized Breese to negotiate the purchase of 70 new high school band uniforms from Fruhauf Uniforms, Inc. of Wichita at a proposed purchase price of $40,777.10