SIKESTON — If Sikeston R-6 voters approve an $18.6-million bond issue next month for new construction in the school district, they will not realize the tax increase until fall 2021.
“The school board and the school district wanted to be sensitive to what was going on in our community and the impact COVID-19 has had economically and try to allow time for the economy in our area to improve and not put an immediate increase on our community,” said Sikeston R-6 Superintendent Dr. Tony Robinson.
Voters will decide on June 2 whether to approve $18.6 million to fund phase two of the district’s facilities plan. The total cost of the project is $21.6 million; however, $3 million of that total has already been approved.
Due to the COVID-19 situation, the Sikeston R-6 School District reached out to financial advisors to see if all or part of the debt levy increase needed to support the upcoming bond issue could be deferred until 2021.
Several scenarios were presented, and administration shared with the Board of Education on Tuesday during its regular monthly meeting an option that allows a split issuance, which the board ultimately agreed to implement if the bond issue passes next month.
“The consensus was probably the best and safest way to do this for the district would be if we split that issuance,” said Lori Boardman, R-6 Director of Business Services.
This split issuance will allow the entire levy increase to be deferred until 2021.
Board President Matt Tanner asked how the district can start the project without getting paid until 2021.
“Once the voters have spoken and said: ‘Yes, we will support this,’ as soon as we sell the bonds, then that payment schedule will come into place for that fiscal year, but this is two-fold,” Boardman said.
Sikeston R-6 would use reserve funds to get the project started in July and then reimburse the operating funds once the bonds sell in September 2020 when the first sale for $10 million is proposed, she said.
Capping this sale at $10 million will make the bonds bank-qualified which will result in lower interest rates to the district, Boardman said.
The second sale is proposed for April 2021 for $11.6 million.
“We have enough reserves in the debt service fund that we can pay that first spring payment without collecting taxes,” Boardman said, adding under state law, districts have a year advancement on reserves.
Boardman noted the following question previously asked by board member: If the bond is split in two issuances, would there not be additional costs?
“There would be some duplication costs in issuance for the district of $45,000, but the potential lower interest in spreading this out would save the district close to $300,000 over the life of the bond, so it’s win-win,” Boardman said.
Tax payers will not have an increase in their tax levies until 2021 by handling the bond sales in this manner, she said.
“This is not a detriment to the district to do this,” Boardman said. “… This is the safest way for the Board of Education to defer that tax payment.”
Phase two of the district’s facility plan includes construction of a new Lee Hunter Elementary, construction of a new “C” Building on the senior high school campus and the raze of Matthews Elementary, Lee Hunter Elementary and C Building.
The goal is to help Sikeston R-6 taxpayers, Robinson said.
“We want to thank our Board of Education for agreeing to take these steps during this difficult time,” the superintendent said. “We are very aware of the financial toll that COVID-19 took on our community. This will allow voters to still make the choice to provide our students with safe efficient, and up-to-date learning environments without feeling the impact during this uncertain time.”