It's no secret that Dodge City schools are facing overcrowding.
Now, the district is faced with the challenge of paying for a second middle school.
On Sept. 8, the board approved early designs for renovations to the current Dodge City Middle School and an overhaul for Hennessy Hall at the old St. Mary of the Plains campus.
The former academic hall would be used as a second middle school campus. The estimated cost of the projects totals $58.7 million.
Which leads to the question: How exactly is the school district going to wrangle the necessary funds? To sparse out its debt, board is considering several options to finance it over 15, 20 or 25 years.
The faster the debt is paid off, the more money will be saved in interest payments; however, the mill levy will increase. The longer it takes to
pay the bill, the lower the mill levy is, but more interest will be
paid.
Basically, the higher the district's mill levy is, the more Dodge City residents pay in property tax.
Officials said the board is favoring a 20-year level debt service plan, but are still weighing the pros and cons of several others.
With a 20-year level plan, the district would pay $37.7 million in interest.
However, as the district already has debt, a separate plan would allow it to pay smaller amounts until its current $55 million debt is paid off in 2018. However, this would rack up almost $49 million in interest.
State aid for this project is set at 49 percent, so the state will pick up $28.9 million of the proposed $59 million plan.
How this affects taxes
The bottom line: On the 20-year level plan, property taxes on a $100,000 home would jump $11.92 a month.
Under the delayed plan, it would jump $7.88 a month. Over time, however, property owners would put up $11 million more in interest.
At a Monday work session, board members Kelly Heinrichs and Brian Winter both said they favored the level plan because it would save money in interest payments and keep mill levies down.
"Another thing I like about the 20-year level plan is that it drops significantly in 2019," President Dan Reichenborn said.
This drop leaves room for projects and improvements in the district that may arise in the future.
Public unrest
While the board looks at options to finance the middle school project, local residents are still split when it comes to the bond issue.
"We definitely need a new middle school and updated facilities," said Raymond Small, a science teacher at DCMS.
Small said he understood the district's decision to renovate Hennessy Hall. According to a study conducted by USD 443 earlier this year, many Dodge City residents hoped to see the building used.
St. Mary of the Plains also has personal significance to Small, who attended the university and was married in its chapel.
Small said teachers at DCMS realized the need for updated facilities, but were primarily focused on teaching kids.
As for why some residents have been vocally opposed to the project, Small said he felt that residents of Dodge City care about education, but were concerned about the volatile economic state of the country.
"Everyone wants the best for kids, but when you get into paying more taxes it's tough, especially now," he said.
Dodge City resident Mandy Villasenor said she didn't think the tax increase will be well received.
"Our taxes are already too high and with the financial problems already in place, raising taxes would cause more problems," she said.
What's next?
If approved, the debt for renovating DCMS and Hennessy Hall would take until 2029 to be paid off. The option to refinance is also available if the district receives more than its expected tax revenue based on a 2 percent projected growth rate.
Over the last 12 years, Dodge City has seen an average 2.8 percent growth, so there is a chance the bond payments would be distributed among more households.
Small said he thought the Butler National casino could bring in good people and families for the local economy and education system.
"I think it's going to help," he said. "I hope I'm right."
The board is scheduled to select a finance plan for the bond on Monday.
Reach Cherise Forno at (620) 408-9931 or e-mail her at cherise.forno@dodgeglobe.com.
Bond finance options
15-year level debt service:
Total interest: $26.6 million
With 0 percent growth in the district's assessed valuation.
• Average mill levy — 14.68 mills
• Annual taxes* — $168.70
With 2 percent growth:
• Average mill levy — 12.58 mills
• Annual taxes — $144.63
20-year level debt service:
Total interest: $37.7 million
With 0 percent growth:
• Average mill levy — 12.39 mills
• Annual taxes — $142.47
With 2 percent growth:
• Average mill levy — 10.13 mills
• Annual taxes — $116.54
20-year debt service with delayed principal payments:
Total interest: $48.9 million
With 0 percent growth:
• 7.97 mills through 2018
• Annual taxes — $91.65
• 18.10 mills starting in 2019
• Annual taxes — $208.11
With 2 percent growth:
• 7.23 mills through 2018
• Annual taxes — $83.15
• 14.83 mills starting in 2019
• Annual taxes — 154.55
*Tax figures based on a home valued at $100,000.
Source: USD 443, based on a report from John Hass of Ranson Financial Consultants, LLC.
