Bentonville board in initial talks on building next schools

BENTONVILLE -- Student growth continues to demand the School Board's attention, even as the School District prepares to open its second high school next month and its 11th elementary and fifth middle school next school year.

District plans through 2020 call for a 12th elementary school, a sixth middle school and a fourth junior high school, said Janet Schwanhausser, district finance director.

"We're just at the beginning stages of having that conversation about whether or not we're going to go for a millage," she said.

School officials for the district, which had 16,000 students last school year, expect to see from 500 to 700 or more new students when the school year begins Aug. 15, School Board member Joe Quinn said.

"The growth is incessant," Quinn said. "Essentially we grow a building a year."

The School District paid the $64.8 million cost of West High School in Centerton with a millage increase, from 43.7 mills in the 2013-14 school year to the current rate of 46.6 mills. A mill is one-tenth of a penny.

No tax increase was required to pay the $26.9 million cost to build Osage Creek Elementary School and Creekside Middle School, Schwanhausser said. The district will finance those projects by setting aside a certain amount of money each year toward second-lien debt payments.

"It's pretty remarkable we're building two new schools now without a tax increase," Quinn said.

But Quinn thinks it's likely the School Board will need to ask voters in the fall of 2017 for a millage increase.

Quinn said residents ask him why the School Board doesn't plan differently. The board has spirited discussions about most every issue and is aggressive in asking questions, he said.

"We try hard not to spend in areas that aren't needed," Quinn said. "You can make smart decisions on a month-to-month basis. You still somehow have to pay for 700 students."

The School Board this month approved a request from the administration to spend up to $660,000 to hire teachers because of growth, Quinn said.

"When you grow 700 to 800 students a year, it's not easy," he said.

Schools cost from about $13 million for an elementary school to about $20 million or more for a junior high school, School Board President Travis Riggs said. The district must follow state guidelines in the amount of land that must be purchased for a school site.

Riggs also thinks a millage increase is likely, though another refinancing of debt could help minimize the amount of the increase, he said.

The board will make a decision within the next eight months about the locations of the planned schools, Riggs said.

Growth areas are in the district's west, southwest and north, Riggs said. While the district likely has enough enrollment for a second elementary school in Bella Vista, the district has struggled to find a large enough piece of flat land in Bella Vista.

A possible alternative is to build on the north side of Bentonville, Riggs said. Riggs is doubtful about finding land closer to the Missouri border.

State law requires school districts to hire a financial adviser whenever they want to borrow money, said Scott Beardsley, senior vice president of First Security Beardsley, based in Little Rock. The firm has an office in Springdale and consults with many school districts in Benton and Washington counties.

When school boards anticipate building new campuses, Beardsley encourages them to plan for the cash flow to make the debt payments and to pay the increased operating cost, especially staff salaries, he said.

Beardsley gave the Bentonville School Board an update on finances this month. His report shows an expected increase in the district's tax base from $1.72 billion to $1.78 billion.

Growth in the tax base will provide more revenue for the School District for 2016-17, Beardsley said. As the tax base generates more revenue, Beardsley has encouraged the School District leadership to set aside $500,000 or more of that additional revenue as a reserve for future debt payments.

Beardsley is studying what the School District could afford to build without a millage increase and plans to report back this fall.

NW News on 07/23/2016

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