Otsego takes step to build school
Written by By MARIE THOMAS Sentinel Education Editor
Tuesday, 01 December 2009 10:38
TONTOGANY - Otsego Schools will use a lease-purchase plan combined with state and federal funds to construct a new elementary school on its campus here.
The Board of Education on Monday voted 4-0 to move ahead with phase two of its facilities program, which will include a new PK-5 building in Tontogany, renovations to the junior high school, and demolition of the elementary schools in Grand Rapids, Weston and Haskins. Board member Elizabeth Gorski was absent.
About 50 people attended the meeting; several voiced their disfavor at the idea of consolidation, but most spoke in support of the school board and the decision to move ahead with the project.
"In looking at the numbers, I just don't see any way how I could recommend to the board" keeping three elementary schools, said Superintendent Jim Garber.
Board President James Harter, before the vote, said the district had wrestled with its facilities issue for 30 years. The questions board members needed to address: "How can we better maintain and control our costs, and how can we address facility needs."
He indicated consolidating to one elementary answers both those issues.
"This has not been a decision that any of us have taken lightly," Harter stated.
Garmann/Miller, of Mentor, which designed the high school, will develop plans for the
elementary. According to the time line given by Garber, design development will take up much of 2010, with the awarding on contracts in early 2011, then construction through June 2012.
The total project budget is estimated at $26 million. Of that, the new school will cost about $17.9 million, with renovations and updates to the junior high set at about $7.2 million. The cost of abatement and demolition of the three elementaries is tagged at $900,000.
The state share of costs is $7.1 million. A $14.2 million credit held by the Ohio School Facilities Commission from the completion of high school portion of the facilities plan will be applied to the local share of costs.
According to Garber, the district's $3.9 million responsibility will be covered by the sale of Qualified School Construction Bonds. The bonds provide federal tax credits for bond holders in lieu of interest in order to significantly reduce an issuer's cost of borrowing for public school construction projects. The district is borrowing $4 million and paying 1.9 percent interest, or about $600,000, over 15 years.
"We have to show OSFC that we have $4 million" before it would release the district $14.2 million credit, Garber said.
The district also will enter into a lease-purchase option. In return for bond holders purchasing the construction bonds, a lender for 15 years will own the building as well as the property. At the end of 15 years, both the building structure and the property will revert back to the board of education.
Operational savings he's estimated at $320,000 annually - "made possible by improved efficiency" through reductions in fixed costs as well as administrative, teaching and support staff - would be used to pay off the loan in 15 years. He said he would bring to the board in December his proposed reductions.
There will be no cost to taxpayers to build the new elementary, according to school officials.
Garber also discussed why he recommended the board shouldn't delay in making its decision.
A letter in June from OSFC cautioned Otsego that if the district should elect to not participate in the state-funded program this year, "we cannot give any assurance as to when your school district would next be eligible for funding."
Garber has said for several months he's not confident the construction funding will be available for long, given the state's gloomy financial outlook.
Grand Rapids resident Jim Tolles said he wanted children to get an education, but in their own community schools.
"Quit making all these cuts and start educating these kids," he stated.
He vowed to not support any new operating money requests if the board went ahead with the consolidation plans.
Another Grand Rapids resident pointed to November's school board election results, which he said indicated the majority of Otsego residents didn't want to move forward with this project.
Tontogany resident Nathan Wallace, who said he was bused to all three elementaries as a kid, said having students together for their entire school years would be a "huge benefit." He praised Garber for defending the financial feasibility of the recommendation.
"We can't afford to operate a system that is inefficient," said Middleton Township resident Rod Limes. The district, he said, needs to be as frugal with funds as possible, and get the optimal return on its investment. "If the numbers are true and accurate, no one can dispute what we're doing."
Garber also said the new school will help balance class sizes, eliminate busing issues, group teachers by grade level to tap into their strengths, and provide a handicap-accessible and climate-controlled learning environment.
"This is the right time to do this. The cost is never going to be this cheap for our taxpayers," he stated.