Cape schools look for more funding

REVENUE OPTIONS

By Callie Chitwood ~ Southeast Missourian

The recent completion of the $17 million Central High School has officials in the Cape Girardeau public school district considering future projects, namely a $5 million auditorium.

But while school board members talked about the possibility at their meeting this week, chief financial officer Rob Huff urged caution.

The district is still walking a tight rope after barely escaping a financially-distressed designation from the state due to a lack of monetary reserves in 2001.

The budget will again suffer a major setback this year with no additional money from their main funding source: the city's assessed valuation of property.

"We have a lot of projects going that we haven't paid bills on," Huff said. "We need to get our finances in order before we tackle another big project."

County Assessor Jerry Reynolds said that the school district will normally see an increase of 4 percent to 5 percent annually in the assessed valuation, but this year it remained stagnant.

"I don't know how much money that increase amounts to, but I'm sure it's a lot for a school district," Reynolds said. "This year it'll break even or maybe even less than that."

The loss of funding was primarily the result of major decreases in the assessed valuation of two local companies -- Biokyowa Inc., and Lonestar Industries, Inc. Both companies saw significant reductions in the past year, which caused their assessed valuation to fall, Reynolds said.

The need for local financial support is made even more critical by the school district's status as one of Missouri's 63 hold harmless districts, which limits the amount of state funding. Hold harmless districts are those that receive more per-pupil state funding than they would otherwise be entitled to. The downside: State aid for such districts is frozen at 1992-93 school year levels.

On top of that, Cape Girardeau schools will face a 29 percent increase in property insurance and 23 percent increase in worker's compensation costs during the coming school year.

Possible solution

The need for additional funding, combined with the current low interest rate trend, puts the district in an ideal position to refinance $18 million in bonds issued in 2000 for the new high school, Huff said.

Larry Hart of LJ Hart & Co. presented school board members and administrators with several plans for refinancing the bonds at the board's monthly meeting on Monday.

Overall, refinancing would produce a net gain of several million dollars depending on the proposal selected, Huff said. The money can go toward paying off the bonds or toward projects within the district.

"It's not a question of whether we should refinance, it's a question of which plan to go with," Huff said.

School board president Dr. Bob Fox said refinancing would allow the district to pay off the bonds sooner, which could mean a no-tax bond issue in 2003 or 2005 to build the new auditorium.

"In the long run, it's just like refinancing a home," Fox said. "We'll pay less money over time, even though we'll be paying the same amount each payment."

Pending an inquiry into the cost of refinancing, Fox said the board may make a decision by their August meeting.

The board will also decide whether to go with a negotiated sale, which would allow for local participation, or a competitive sale, which would guarantee the best rates on a specific day.

While board members will make the ultimate decision about the bonds, administrators have set priorities about where the additional money should go -- teacher salary, maintenance and new construction.

From Huff's perspective, the most pressing need is raising teachers' salaries so that they're comparable with other districts in the region. The base salary for first-year teachers in Cape Girardeau schools is $23,500 -- $4,000 less than the starting salary at Jackson schools.

Huff also emphasizes the importance of keeping up construction and maintenance on the district's older facilities.

"We still have significant needs in our older buildings, they're not going to last forever," Huff said.

For the time being, Huff said he has adopted the motto "don't put the cart before the horse," and he's applying it wherever he can.

"I don't want to scare everybody, but there are still challenges we have to deal with," Huff said. "We're on the road to being out of the woods, but we're not out of the woods yet."

cchitwood@semissourian.com

335-6611, extension 128