Home Elected Officials Funding Mechanism Reviewed by BOC for High School Wing

Funding Mechanism Reviewed by BOC for High School Wing

Attendees at the special BOC meeting.

In unanimous agreement, the BOC (Board of Commissioners) tonight (11.27.17) favored a mechanism that would utilize the IDB (Industrial Development Board) to fund a high school wing for the Lakeland School System (LSS).

In just under two hours, the BOC, in special session, concurred that a debt structure unique to Lakeland could be the route to funding a $36.5 million high school wing to LMPS (Lakeland Middle Preparatory School). The loan for the high school would only be $33 million because LSS has $3.5 million left from the middle school build.

The plan must now have votes from the LSB (Lakeland School Board), IDB and BOC.

Another view, audience at BOC meeting

Link to tonight’s agenda: http://tn-lakeland.civicplus.com/ArchiveCenter/ViewFile/Item/720 .

Chris Patterson, city attorney, explained the City would utilize the bonding authority of the IDB.  “The IDB can issue bonds. The City would pay the bond debt but the IDB has to own the project.”

Chris Patterson

In this situation, Mr. Patterson said, the schools would be the property of the IDB.  “The IDB would lease the schools to the City and then the City would lease to the School Board.  There would be an interlocal between the IDB and the LSB for the construction funds.  The debt would be for 30 years if you go forward with this plan.

“This is unique, not used before in Lakeland.”

Mr. Patterson said there is a need to move quickly and have additional meetings next week.  The GOP tax plan, currently passed by the House and now in the Senate, would impact the affordability of this project. “The property tax legislation would impact how a note (CON – Capital Outlay Notes) can be financed.” He said many cities across the United States are refinancing their debt before Dec. 31.

The LSB meets in regular session at 5:45 p.m. Dec. 4. Additional meetings for the BOC and IDB have not been set, although both could be on the same night, different times next week. The LSB passed the CIP (Capital Improvement Plan) Nov. 20 and the BOC approved the CIP tonight.

Commissioner Matt Wright noted that at a four percent interest rate, for 30 years, the debt amount would be $52.4 million, combining the current $17 million CON (Capital Outlay Notes for LMPS), the $33 million for the high school wing and escrowed interest.

Background on a high school

Since its inception as the LSS, Lakeland Elementary School (LES) was the only facility in the System.  LMPS was opened this year for grades 5-8 and tonight the proposal was to complete LSS by adding a high school wing next to the new middle school.

In April 2015, voters went to the polls in a special election and defeated a $50 million bond issue which would have constructed a middle school and high school on the current LMPS campus.  As a compromise, the BOC financed LMPS but not the high school with a $20 million CON, approving a 55-cent property tax to pay for the CON.

Lakeland had an interlocal agreement with Arlington Community Schools (ACS) to educate its children at their middle and high schools.  With the opening this August of LMPS, the interlocal is only for the high school, although current AMS students were allowed to stay on that campus if they provided their own transportation.

Why a high school wing now?

Mr. Patterson outlined the series of meetings that led to the proposal tonight.

  • At the first 2020 meeting (Lakeland 2020 Strategic Plan) Sept. 27, Dr. (Ted) Horrell (superintendent of the LSS) was asked by the BOC to research the costs of a high school wing.
  • On Nov. 9, Dr. Horrell reported to the BOC his findings.
  • The BOC then asked Jessica Millspaugh, city recorder and finance director, what it would cost to finance the new debt and City Manager Jim Atkinson was asked if those figures would fit in the budget.
  • Around that time, the GOP tax proposal came up on the radar.

Vice Mayor Josh Roman said the long term vision of the BOC was to have a K-12 school system. “There is no way around it.”

Vice Mayor Josh Roman

Mayor Wyatt Bunker said, ”I think it’s past time to make this move.  We’ve shown we can do this. We can be the best in the state.”

Mayor Wyatt Bunker

Commissioner Clark Plunk said, “Proudly I can say I was the only commissioner to have voted for both the middle school and high school.”

Commissioners Matt Wright and Clark Plunk
Commissioner Matt Wright

Commissioner Wesley Wright said he was clear four years ago and when he ran for office earlier this year that he believed Lakeland had a need for a high school. “There are many benefits to ‘being good stewards of our youth’”, said Mr. Wright, quoting a Lakeland citizen Deborah Thomas who spoke in favor of the high school.  “K-12 benefits all ages and not just small sections.”

Commissioner Wesley Wright

Among sixteen citizens who addressed the BOC were 11 who were in favor of building the high school wing now, four who were opposed and one senior citizen who wanted relief on his property taxes.

Julie Bingham spoke of her teaching career, including time at Houston High School in Germantown, noting she favors building the high school now.

Gary Cansler asked about a tax break for senior citizens. Commissioner Matt Wright responded the City did decrease taxes this year and hopes to have other tax reductions going forward.

Katie Autry spoke of her three children in the LSS and said she is in favor of finishing the high school and sports fields.

Richard Gonzalez  said he thinks the City should wait until there is more commercial and industrial growth and told Commissioner Matt Wright thanks for his $40 tax decrease (referring to the City lowering the tax rate this year during the reappraisal year.)

Mayor Bunker explained the Shelby County Assessor reassesses property and the Lakeland average increase was 12 percent.  The tax rate went down to $1.29 to offset the increased values. The City then lowered the rate to $1.25.  He noted Lakeland could have kept the tax rate at the former rate of $1.40.  He furthered explained the City is working to eliminate the fire fee (currently payable on the MLGW bill) which is a larger decrease.

Jeremy Burnett thanked the BOC for its vision to think ahead and said he wants one comprehensive school system.

Deborah Thomas spoke of her years teaching in Knoxville and said she favors investing in the high school level and believes a smaller school is a good idea.

Carl Helton simply said he is in favor of a full K-12 system.

Morgan Galvez said she wants a K-12 system.

Melanie Mays said citizens voted down the building of a high school in 2015. She also quoted Dr. Horrell as saying recently that a high school is not needed and he would wait on that construction. She added that without a new vote, it goes against the will of the citizens.

Adam Henry, in speaking for the high school wing, addressed the money aspect.  He went to http://comptroller.tn.gov/ and found there are 114 cities in the state of Tennessee with higher property taxes than Lakeland.  Statistics on county ratings find Shelby County to be No. 11, he said.  “The City is not overtaxed,” he said.  “In a 2010 report, eight cities filed bankruptcy. That’s less than one-half percent.  It’s not even in the risk category.”  He questioned trying to get businesses to invest in your City if you won’t invest in your town to build a high school.

John Borden said Lakeland should continue the path for “our own children in our City.”

Lou Melton asked what type of bond will be financed, why chose that one, can citizens vote on this bond and what is the amount of interest  to be paid in refinancing the CON.  Mayor Bunker said her questions should be answered in staff presentations about the loan and its structure.

Michele Dial, former Lakeland commissioner and a Bartlett schools assistant principal, said, “I trust you explicitly.  It’s a really good time to get this high school built.  If you feel the City can afford a high school without a tax increase, this is the time to do it.”

Michelle Childs, a Lakeland resident who is currently living in Krakow Poland because of her husband’s job, sent a statement to Commissioner Matt Wright. She owns property in Lakeland and expects to return to the City with her family.  “This will be security for all our students.  There will be no more worrying about a high school.  It will reflect community pride.”

Bruce Welsh asked how long a new high school would take to “ramp up.” Asked by Mayor Bunker to comment, Dr. Horrell said with the right people, it can be done right away.  He said it would be no different at a high school than it was at the new middle school this year.  “We have the principal and the same administrative staff. It’s just a matter of scaling that up.

Dr. Ted Horrell

Darla Magnan was last to speak and said she has children who willingly moved from AMS to LMPS. “We respect Arlington a lot,” she said, “but we are excited about a high school.”

Mentioned by two commissioners was cyber-bullying in recent years which impacted them and their families.  Vice Mayor Roman said he was the poster boy for the bond vote when the vote was lost.  “Since that day my family has paid a pretty big price. Everyone knew I was a proponent for a K-12 system,” he said.

Commissioner Matt Wright said,” We all have our businesses and were attacked for wanting to build a high school.  He commented on a social media post which used scare tactics saying property values would go down and no one would move to Lakeland.  Today, he said, Lakeland home sales lead Shelby County and home values have gone up.

On the three agenda items, the BOC unanimously approved them:

A resolution confirming terms for IDB/EDC (Economic Development Commission) members

Resolution approving the LSS five-year CIP (Capital Improvement Plan)

First reading on an ordinance amending the fiscal year 2017-18 budget.
… Photos by Jim Willis, Lakeland Currents, Album of speakers: https://photos.app.goo.gl/fozv4p3AOsyxmFem1