Proceedings of the Board of Trustees
Lockwood School District No. 26
Yellowstone County, Billings, MT
Special Meeting of July 25, 2006
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CALL TO ORDER

The special meeting of the Board of Trustees of School District No. 26, Lockwood Schools, Yellowstone County, was duly held in the Board Room, 1932 U.S. Highway 87, Billings, Montana on Tuesday, July 25, 2006.  Chairperson Teresa Stroebe led those present in the Pledge of Allegiance and called the meeting to order at 7:05 p.m.

Trustees and officers present were Trustees: Sue Vinton, Teresa Stroebe, Becky Malenowsky and Tim Trafford, Superintendent Eileen Johnson and District Clerk Diane Brook.  Trustees Greg Bochy, Thomas Jones, and Barbara Forrester Frank were absent.

Staff members present were:  Mike Bowman and Art Anderson.

Registered guests present were Angie Buckley of the Billings Gazette, Evelyn Pyburn of the Yellowstone County News, Terry Sukut and John Eisen of JGA Architects, Keith Campbell of A.C.E., Inc., Bridget Ekstrom of D.A. Davidson, Tim Sather, and Holly Sather.   

Mrs. Stroebe welcomed visitors and advised the following:

If you wish to speak to the Board of Trustees at this meeting about agenda items, please complete a form and give it to the Board Chair or the clerk.

Any person present, who wishes to do so at this point in the agenda, may address the board or raise any question about public school district matters or governing policies. No discussion of personnel or individual students is permitted at this time. A limit of three minutes is placed on each speaker. Persons who want more time may make arrangements to be placed on a future agenda.

PUBLIC COMMENT

None

PUBLIC WRITTEN REQUEST TO BE PLACED ON THIS AGENDA

None received

RESOLUTION OF INTENT TO DISPOSE OF DISTRICT PERSONAL PROPERTY

After a brief discussion of the property to be disposed of, Tim Trafford moved to resolve to dispose of the listed personal property per the following resolution:

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Page 2
Special Meeting
July 25,

LOCKWOOD SCHOOL DISTRICT NO. 26
RESOLUTION OF INTENT TO DISPOSE OF PERSONAL PROPERTY

At a special meeting of the Board of Trustees of School District No. 26, Yellowstone County, Montana, held July 25, 2006 at 7:00 p.m. at Lockwood School Administration Building, the following resolution was introduced:

WHEREAS, the trustees of School District No. 26, Yellowstone County, Montana, have determined that certain personal property of the district is or is about to become abandoned, obsolete, undesirable, or unsuitable for the school purposes of the district;

WHEREAS, the trustees have determined that such property will be sold or disposed of;

THEREFORE BE IT RESOLVED that the Board of Trustees of School District No. 26, Yellowstone County, Montana, per 20-6-605 MCA, shall dispose of such property by local sale via sealed bids. Sealed bids will be received between 8:00 a.m. and 4:00 p.m. on August 14, 2006, at the Lockwood School Administration Building.

ITEMS TO BE DISPOSED OF:    1989 Ford 4-Wheel Drive Pickup
                                                   1984 Chevrolet 4-Wheel Drive Pickup

Sue Vinton seconded the motion.  Sue Vinton, Tim Trafford, Becky Malenowsky, and Teresa Stroebe voted aye; the motion passed four to zero.

BONDING INFORMATION

Bridget Ekstrom, Vice President of Public Finance with D.A. Davidson, was present to provide bonding information.

Bridget reviewed the following documents that she provided to all present:

Lockwood Elementary District Estimated Debt Limitation Calculation
Lockwood Elementary School Mill Levy Impact Analysis for
$8.0, $10.0 and $13.0 million G. O. Bonds, 20-Year Term
Lockwood Elementary School Mill Levy Impact Analysis for
$13.0, $13.2 and $13.4 million G. O. Bonds, 20-Year Term
Estimated State Advance for School Facilities FY 2006-07 (20-9-422, MCA)
Example of a Debt Service Schedule for General Obligation
School Building Bonds, Series 2005, for $13,200,000

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Page 3
Special Meeting
July 25,

During her review of the Estimated Debt Limitation Calculation, Bridget pointed out the footnote that said the amount of district debt capacity could be increased by $233,333 up to $13,481,334, because the bonds would be issued after the first tax collection date of November 30, 2006, and therefore increase the debt capacity by the amount of the 11/30/06 Building Reserve tax collection of $233,333.

Ms. Ekstrom advised the trustees should they decide to have a bond election, they will adopt a resolution prepared by bond counsel.  The three things they will decide are: principal (amount), purpose and term of bonds. 

She provided examples of public information brochures that Laurel, Belgrade and Red Lodge had used when they ran a bond. 

Trustee Trafford asked if the state guarantees the estimated average annual state aid for Debt Service. 

Bridget responded no they do not.  She advised that each year the numbers change due to enrollment changes, and every biennium the allocation can change due to legislation.  She said she feels pretty confident that it will continue because there has been a steady increase in the funds since the inception in 1991.  Bridget commented that we provide the best data to the taxpayers that we have at the time of the election.

Ms. Ekstrom explained that D.A. Davidson provides assistance free of charge up to the passage of the bond.  If the bond passes, then D. A. Davidson would like to become the bonding agent for the district. 

Bridget advised that the district would receive money from the bond within 90 days of the successful bond election.  All investment earnings on the bonds would be used for purposes of adding to the project.  She advised that most districts keep the interest proceeds for contingencies.  It is possible that Lockwood Schools could earn up to one-half million collars in interest as extra income for the project. 

There was discussion of how to pose the ballot question.  Bridget asked if the trustees felt the proposal  would be all one integrated project.  She said Dan Simmons, bond attorney at Dorsey Whitney, wanted to know if this was considered one project.  He needs to review the legal perspective to be sure the project is one ballot question.  The main consideration is whether or not you could do one project without the other.  Since the HVAC systems will probably be integrated and some areas in the existing building will need to be vacated prior to completing the updating and renovation, it is reasonable to assume that the entire project is linked.  The trustees, superintendent, architects, and engineer agreed with this conclusion.

Bridget commented that the estimated number of mills required for Debt Service will change after the new taxable valuation is received on August 7, 2006.

Ms. Ekstrom advised:  In the election question, you want to be specific enough that voters know what they are voting on, but general enough if bids come in high the project can be modified.

Tim Trafford mentioned the phased-in taxable valuation for Exxon.  The value is being phased in at 20 percent per year.  As tax base goes up, the cost per house goes down.  The cost could be substantially less over time, because as the taxable pool gets bigger the tax cost for the bond goes down. 

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Page 4
Special Meeting
July 25,

There was discussion of interest rates for the bond and what the district can do to get the best rates. 

Bridget noted that getting a bond rating may be a problem due to Exxon being such a large taxpayer in the Lockwood District.  Laurel did not go through the process of getting a rating, because they felt it would not be helpful due to Cenex being such a large taxpayer in their district.  They decided to request municipal bond insurance instead, which is a common practice. The underwriter has to purchase the policy, which may cost them up to $20,000.  However when municipal bond insurance is purchased, it will give the entity an automatic AAA rating. 
           
Eileen advised that on August 1, 2006, one week from tonight, the Board of Trustees need to set the scope of the project.  At the Special Meeting on August 8, 2006, the formal adoption of the resolution drafted by the bond attorney would take place. 

Supt. Johnson noted that we are already seeing an increase in enrollment in the lower grades for next year.

It was advised that the trustees each had copies of their vision and goals for the future. Chairperson Stroebe said they are a focal point, and it is good to re-visit them.           

DISCUSSION OF BUILDING NEW CLASSROOM SPACE AND HVAC RENOVATION

A. Representatives from JGA Architects provided information.

John Eisen reviewed a document entitled, Decision Making Variables for New Lockwood Middle School Building with those present.  This document detailed five concepts (Concepts 4, 5A, 5B, 6A, and 6B) for the project with costs of each concept.  (See attached.)
           
There was discussion of establishing priorities and making choices to stay within the bonding capacity and what the board feels is reasonable.

Supt. Johnson discussed the daily maintenance costs to clean another gym and locker rooms.  She said more custodial staff would be required.  Ongoing costs for maintenance and custodial care is a concern.  She wants to be conservative enough, so that we can take care of these areas.  Eileen said the number of days the gym is used for a classroom is limited because in the fall and spring the classes are held outside whenever possible. She is not sure that building another gym would be the best use of the money. 

Teresa Stroebe advised that the current gym is always in use after school. 

Eileen said the rent doesn’t offset the costs. 

Teresa felt having another gym may be important to the public.

Eileen said there would be a multi-purpose room in the new area that could be used by the public.

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Page 5
Special Meeting
July 25,

Trustee Sue Vinton asked if these decisions could be made after the bond as part of the design process.  She said that the voters could see an additional gym and/or air conditioning as negatives or positives, depending on their particular perspective.

Tim suggested that the bond ballot language should be imprecise but not misleading to allow for the necessary flexibility.

Keith Campbell advised that seeking alternative bids is a good way to allow for flexibility and staying  within the budget.

Tim asked JGA how accurate their cost projections have been compared to bids.

Terry Sukut replied that they want to provide the most we can for dollars that we have.  They have a contingency of 10% and an escalation of 10% built in to their projections.  As the project is refined and defined, the figures become more accurate because the scope narrows.

The community will have opportunity to help with the design and placement of the facility as there will be design symposiums after a successful bond election.

Tim read aloud the e-mail Thomas Jones had sent regarding the concepts that JGA had detailed.

Bridget Ekstrom provided the language from Bozeman’s bond ballot question; it was very generic. 
She felt it might be important to specify on the ballot that the new building will be built on the existing campus.

Sue Vinton posed this question:  Is there any reason for any of us to be requesting anything less than the full bonding capacity?

Teresa said she felt that we have come full circle.  The administration and trustees saw the need for additional space; they put the information out to the public via the Steering Committee; the Steering Committee recommended a bond election to address the needs.

Tim Trafford advised that if he were to make a motion or vote tonight, he would vote for requesting the full bonding capacity to address the needs of the district.

Becky Malenowsky said she is leaning toward Concept No. 4 with a projected cost of $12,643,000.

Eileen Johnson advised that she is concerned about the additional custodial and energy costs to maintain the new space; she wants that to be considered when deciding the scope of the project.

Teresa is in favor of having a practice gym in the new facility.  She said she felt it would be important to have the gym air conditioned also.

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Page 6
Special Meeting
July 25,

Keith Campbell tried to address the utility costs for air conditioning a facility like this.  He said it can be a significant cost.  He estimated with year around occupancy, it would be a 30%-40% net increase in utility costs.  Without summer occupancy, it would probably be a 20-25 percent increase.

Mrs. Johnson said that it is unfair to compare residential air conditioning with school air conditioning.  Classroom situations are so much different than a home situation. At school we have 30 or more bodies in one room.  We want to try to provide an excellent learning environment and children are affected more by the heat than adults.

Tim asked if interest rates were better for shorter term.  Bridget said yes, but not significantly so.  She also advised that school districts can re-finance after one-half the term of the bonds.

B.  Cost and Scope of Project

The trustees decided to wait for action on this item until August 1, 2006.

NEXT MEETINGS

Special Board Meeting - August 1, 2006
Regular Board Meeting - August 8, 2006

ADJOURN

Sue Vinton moved to adjourn the meeting at 8:45 p.m.  Tim Trafford seconded the motion.  Sue Vinton, Tim Trafford, Becky Malenowsky, and Teresa Stroebe voted aye; the motion passed four to zero.

 

Teresa

Respectively Submitted,

___________________________      ___________________________
Teresa Stroebe, Chairperson             Diane M. Brook, District Clerk

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