Cape school bond package will result in $28,500 net increase in operating costs

Nearly a week before the Cape Girardeau School Board is scheduled to vote on a proposal to approach voters with an almost $40 million bond issue, its size and impact on the district budget remained a concern for some board members.

During the two-and-a-half hour discussion Tuesday, board members mulled over statistics calculated by a team of architects, engineers, financial advisers and construction managers. The analysis showed that the buildings constructed with the bond issue would incur a net increase of $28,500 in annual operational costs.

The number reflects $12,500 in savings by eliminating stadium rental for football games. The district's contract with Southeast Missouri State University will be renegotiated this year. The district would also save $7,200 in costs to transport students to campus for games. By having its own stadium with concession and door revenue, the district budgeted $13,500 in additional money.

The analysis also showed $20,488 in energy savings but additional insurance and maintenance costs totaling $82,230.

Board member Tony Smee said the school board needs to justify any increased costs. He said he was concerned about revenue decreases and the increased cost of operation over the next five years. He also cited the district's current struggle to balance the budget in a down economy.

"We're in a financial mess, and we don't know the end result," Smee said.

For the first time in a meeting about the bond proposal, a board member suggested scaling it back. In its facilities plan, the district outlined more than $50 million in projects. About $40 million received top priority for a bond proposal.

Board member Paul Nenninger suggested only moving forward with projects in the bond issue that will increase energy efficiency in district buildings. After the district's budget adjusts to the first wave of projects, it can proceed with more bond issues.

"I'm always looking for plan B," Nenninger said. He noted the district has a history of larger packages failing while smaller incremental proposals have been successful.

"If you package it as two, it's not going to make it any cheaper," said John Berglund, an architect with the St. Louis firm Bond Wolfe.

Financial advisers said once the economy rebounds and interest rates increase, the cost of construction projects will also go up. The district could also approach voters in five years with a $15 million bond issue without increasing the tax rate, officials said.

Eliminating projects now will alienate staff members who have bought into the plan, Berglund said. By packaging stadiums and auditoriums with new roofs and boilers, the district created a package that will draw more emotion from voters.

"I can't do a rendering of a roof," he said. "I can't do a rendering of a boiler."

If a large package fails, it will be hard to pinpoint its weakness, Nenninger said.

"If you have something for everyone, you don't know what sunk your ship," he said.

Nenninger said phasing in projects would be less of a gamble.

"You say it's a gamble like no one's done any research," said board president Kyle McDonald. Superintendent Dr. Jim Welker also said it would be more of a gamble to eliminate projects at this stage.

The board will meet again at 6 p.m. Jan. 13 to vote on putting a bond proposal before voters in the April 6 election.

abusch@semissourian.com

388-3627

Pertinent address:

301 N. Clark Ave. Cape Girardeau, MO