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Iowa City School Board explores funding options

BY LAUREN COFFEY | OCTOBER 03, 2012 6:30 AM

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Talk of reallocating local-option tax funds has been a contentious issue for the Iowa City School District and community members for the last few months. Now, officials have proposed using state-controlled funds instead of the locally controlled money to deal with the allocation decision.

School Board members on Tuesday night discussed an option called a general obligation bond, which would give the district access to $100 million from future funding sources. Officials also discussed a bond option that is based on enrollment.

“I really feel as a growing district our community needs a quality learning environment,” Chief Financial Officer Craig Hansel said. “As far as a model goes, it doesn’t matter if we de-fund or don’t de-fund, we can borrow money.”

The district currently uses a “pay as you go project,” in which officials only spend sales-tax money that has been received and is in the bank. The current system has $32 million set aside for a new high school and $20 million for construction on the elementary schools.

The School Board unanimously voted to bring the options to Superintendent Steve Murley, who was absent from Tuesday’s meeting.

With either of the new proposals, the district would have access to funds through 2029. In the current system, the funds are only available to the district through 2017.

“It has a much greater flexibility,” board member Tuyet Dorau said. “[The general obligation fund] gives you the ability to control on how to spend the funds. It has such positive implications for our district.”

Neither proposal will increase property taxes or the sales tax. If the board decided to use a general obligation bond, the increase in available funds would be due to the district’s use of already-scheduled taxes. The bond money could go towards air conditioning for the elementary schools or the creation of a new high school.

Although one of the new proposals only needs to be passed 60 days before the current fund’s expiration date in 2017, Hansel and other board members want to come to a decision as soon as possible.

If the board decides to move forward with one of the state-involved ways of dealing with the funds, they must meet one of several deadlines, the earliest of which is this October. If officials submit a proposal by then, Iowa City residents would vote on the measure on Dec. 4.

If the state approves the general obligation bond option, it would require the support of a super-majority — 60 percent — of Iowa City voters. If the district receives the state’s approval on the other option, officials would only need a majority vote. If voters do not pass either of the proposals, the district must wait six months before presenting the options to the state again.

North Liberty resident Joe Strathman said he believes the discussion of the allocation of the local-option tax funds is distracting from the issue of the new proposals, and believes the board needs to address it as soon as possible.

“It is vitally important to pass [one of the proposals],” he said. “Discussion of the reallocation of the [local-option] funds have caused people in the district to become disillusioned. We need to get refocused on [ways of dealing with the funds]. It’s a matter of priority.”


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