Inflation is impacting the board of education financial decisions as it gets closer to approving a new levy for a new Bowling Green high school.
Several variations on a new levy were considered at the Wednesday board meeting, but it was interest rates that took center stage when considering the timeline and the structure of the levy.
“Since my last meeting, interest rates have gone up significantly,” David Conley, president of Rockmill Financial Consulting, said. “There just doesn’t seem to be an end in sight.”
He presented the various options on March 26.
At that meeting the discussion centered around a 3.5% interest rate.
With a spreadsheet projected on the wall, Conley plugged many different scenarios into his computer, spitting out the new calculations, which would ultimately determine the monthly costs for a household.
This time the board started with a 5% interest rate, but decided on a more conservative 5.25%, because of the implications of a shortfall. Conley pointed out that along with the higher interest rates, there are increased building costs.
The initial estimates of a $58 million dollar school were revised by Superintendent Francis Scruci. Using the most current construction cost estimates from the Ohio Facilities Construction Commission it would now cost $65 million. That would not include an estimated $1 million in demolition costs.
“So that $58 million you are looking at isn’t even close,” Scruci said.
Several board members immediately voiced dissatisfaction when they were presented with the number of items that would have to be cut from the design. They include reducing average classroom size, cutting gym size, removing a study hall, eliminating a media center conference room, reducing the size of life skills, business and marketing, staff lounge and deleting building services storage.
Scruci agreed, noting that with current demographic trends,that with those cuts the new school would be maxed out for size in as little as five years.
Conley, the board and Scruci came to a consensus that $70 million will be needed for the project, given the new economic pressures.
There are two types of levies being considered. With both types the board has some time to weigh options and talk to constituents.
If funds are approved in November, there would need to be six to eight months for the design phase. Bids are then sent out, with 60 days to award. November 2023 is when the bids would be awarded.
With a traditional property tax-based levy the board has to submit a state consent application by July 11 and then file with the board of elections by Aug. 10, and the county auditor has final say on the exact millage rate.
The alternate option is a mixed property tax and income tax levy. That second option files through the state tax commissioner, with a deadline of July 26, and then filing with the board of elections on Aug. 10.
Conley noted that the district is sitting in a pretty good position for the mixed option with an income tax.
“You don’t see a lot of volatility during recessions,” Conley said, adding that there should be “smooth sailing,” primarily because of the university as an employer.
He added that the income tax route is considered relatively new, but locally, Northwood is using it.
No vote was ultimately taken on any of the many different options, with Conley finally asking the board members if this November is the right time for the levy.
“The longer we wait, the more expensive it gets,” board member Ginny Stewart said.
Scruci agreed, saying “We can’t kick the can further down the road.”
The next meeting will be May 31 at 1 p.m.
