Guest Opinion: School district asks county to recognize its capital needs
The Lee County School District needs the help of the County Commission.
We are grateful that they commissioned a study to independently evaluate the contribution impact fees make as part of a total package of capital revenue sources for funding school district infrastructure related to population growth.
And we are grateful for the recognition that quality public education is a critical foundational element in promoting economic diversity and growth. While we are very pleased the report recommends restoring impact fees, we also want to ensure we are clear in describing critical needs for additional student seats not in the capital plan due to funding constraints.
Why are impact fees important to the Lee County School District? After all they represent only a piece of our overall capital funding strategy to support enrollment growth in Lee County.
Between 2004 and 2011, the School District constructed 22 schools. Local impact fees and property millages are used to pay down financing for those properties. At the time financing was undertaken, capital millage was levied at 2.0 mills and impact fees were 100 percent. Over the past five years property values declined, the state cut our capital millage allowance from 2.0 to 1.5 mills and the County Commission reduced impact fees reduced 80 percent. The district lost $640 million in potential capital dollars. We are carrying $448 million in debt. Annual debt service consumes $42 million of our Capital Budget. Our debt has been refinanced in the favorable borrowing market, but the decreased revenue stream still forced us to revise the preventative maintenance/replacement schedule in place for district physical assets.
We need new schools to accommodate continued growth in our student population. We don’t want to take on more debt -a burden for future generations.
Some have suggested we look to our reserves for new high school in the South Zone. We started the fiscal year with $81 million in capital reserves. Our five year plan for maintenance and technology alone will spend the reserve down to $45 million. Our Operating reserve is $51 million; the state requires a minimum balance of $20 million. With more than 100 buildings and an incredibly sophisticated IT infrastructure, we view reserves as our short-term insurance policy for unforeseen devastating acts of nature or man, not as a fund for building the five to seven schools we may need in the next five-10 years should current rates of student population growth hold.
Others have suggested we stop transferring $20 million from Capital to Operating. We are permitted by statute to make the transfer to cover the cost of supporting our capital investments-building maintenance supervisors in buildings and maintenance staff are an example of how we use those dollars. Eliminating the transfers would jeopardize our asset management ability and/or impact educational offerings.
I am aware several legislators have suggested we have not fully exercised our statutory options for funding. The only options we have not exercised are those that require voter approval. We are working to seek voter approval for an alternative funding source in 2016.
So back to the question -Why are impact fees important to us?
We need to open two high schools in the next three to four years. The estimated annual debt service in today’s market on a $50 million bond to build one high school is $3,635,880. Projected FY 15 impact fee revenue in the school district South Zone, assuming a 100 percent levy of would be $3,600,000. In 2016, the estimated impact fee would be $3,780,000 or enough to cover the carrying cost. In the school district East Zone, where we will need to build a new high school in 2018, the annual estimated impact fees from that zone would cover almost half of the estimated $2,864,484 debt service payment.
The School District has attempted to address lingering questions posed by Commissioners and we have tried to make a clear and convincing statement for our desire to have impact fees restored.
We realize we have a common goal-to serve the citizens of our county in making this a world class place to live and we stand ready to work with our County Commission to that end.
Cathleen O’Daniel Morgan is the School Board Chairman. She represents District 3.