Looking at the bond debt picture across the county, comparing the Newton school district to the other local governing entities (city of Newton and Harvey County) is not an apples to apples scenario.
While the city and county governments have debt policies — based off state statutes — that regulate how much they can issue in bonds, the situation is a little different for USD 373. Given where the final authority lies, it is the district patrons that set such guidelines for Newton schools.
"Because everything that we do has to go for a vote, the community ultimately is the one that decides what the cap would be," said Superintendent Deb Hamm of the district's bond indebtedness.
Following the district's next principal bond payment on Sept. 1, 2018, Newton schools will still owe slightly less than $30 million in bond debt — to be paid off in nearly equal installments (though slightly backloaded) by fiscal year 2027.
Currently, USD 373 is still paying for the 2007 bond issue for construction of a new vocational building and renovations to Newton High School, Chisholm Middle School, Santa Fe 5/6 Center, Northridge Elementary and the Cooper Early Education Center. Other bond payments are tied to restructured bonds (with the last bond before 2007 issued in 1995).
Hamm noted it is a tight rope to walk in pursuing a bond. While bond issues are almost exclusively used for major projects (i.e. construction, remodeling or replacement of facilities), the views of necessity and feasibility are ultimately in the eye of the beholder. In regards to the former, the issues the district is trying to address — like with the current bond — are not as tangible as other community needs, which is part of why outreach is such a big part of the bonding process.
"When you drive on the streets and you drive into potholes, you understand the need for street repair. When you turn the water on and you have dirty water, you understand the need for fixing the underground waterlines," Hamm said. "It's not that we want to keep up with the Joneses, but we also want our kids to have the things that they need to have. Right now, we're really not asking for things that are wants. We're really asking for things that are needs."
"That's, I think, the overarching problem is how to communicate that to everybody involved and keeping people informed," said Director of Business Services Matt Morford. "We're not just doing this because we want a new school; we're doing it because we need to and we need to fix all these problems that have been deferred that may not have been addressed in prior years' bonds."
On top of settling on a bond amount that is acceptable to the greatest number of people within the school district, it has to fit into the bigger picture on a state level as well. While the district may not have a cap, the Kansas State Department of Education does (as well as other regulations that complicated the process in recent years).
Right now, that cap stands at $359,468,493 — with a little over $38 million left in bond authority, though that could increase depending on the outcome of a number of issues up for vote in November.
Bond issues impacting cap
Essentially, that is a driving factor in how USD 373 proceeds with its current bond issue. If no more money becomes available under the state cap, it is not believed a bond of the current size being discussed (set between $37 and $44 million at the last work session) would be enough to meet the needs outlined by administration, the Board of Education and community vision team in helping shape the bond.
Another factor Hamm said has to be considered outside of cost is the lifespan of improvements. With the intent to keep bond debt manageable, sometimes a larger bond is better in the long run as minimizing bond total can lead to projects being spread out over multiple years in a short span — something the district saw with the 1995 bond issue.
"I would say that there were a lot of needs at that time and decisions were made to look at what would the community support, and so rather than doing everything at once the goal really was to get some things done, leaving some things for later," Hamm said. "While that's a very prudent way to look at things, it can also lead to other issues like multiple years of bonding."
Doing multiple years of bonding — or deferring certain projects — comes with its own risk, like increasing interest rates and decreasing state aid (which is now at 32 percent, a steep drop from the 52 percent offered during the district's last bond project).
Given enrollment spikes and standard facility wear and tear, Hamm sees bond debt as a constant for any school district. Even while USD 373 considers another bond, though, both she and Morford feel comfortable about the district's position in regards to indebtedness. Comparatively, Newton has a lower total mill levy than 22 of the 30 school districts in surrounding counties (Butler, McPherson, Reno and Sedgwick).
Even with a future bond in the works, Morford doesn't expect that position to change no matter the final total.
"A new bond, while it would increase our mills to get the payment to where it needs to be, it would bring a lot of opportunity to the students and the community as a whole," Morford said. "So, while we're comfortable where we're at, I think there's always room for improvement."
USD 373 administration, board members and the community vision team will continue discussion of the next bond issue at a work session on Oct. 22.