School Board Considers Millage Increase For High School

KINCO APPROVED AS CONSTRUCTION MANAGER

FARMINGTON — Farmington School Board will wait until its July 10 meeting to decide whether to ask voters to approve a 1.25-mill property tax increase to help pay for Phase 3 of the Farmington High School campus.

Farmington School District currently collects 42.6 mills, with 25 mills dedicated to maintenance and operations. The rest, 17.6 mills, is mainly dedicated to debt service.

Superintendent Bryan Law presented financial information at the June 19 meeting on how the school could pay for Phase 3.

If the board wants to ask for a millage increase on the Sept. 19 school election ballot, a decision must be made before the middle of July, Law said. Otherwise, the district would have to wait to call

a special

2018.

Board members indicated last week they were not ready to make a decision on the question.

“I do not want to make a decision tonight,” said board member Travis Warren. “I’d like to talk to some people. It’s a pretty big decision. We don’t need to make it rashly.”

Law said he thought the board could move its July meeting to July 10 and that would allow enough time to meet any deadlines required to place a millage increase on the school ballot.

A rough estimate provided by Law to board members shows Phase 3 would cost about $5.9 million. This includes dirt work, track, football/soccer field, turf surface, concession stand/ bathrooms, press box, bleachers, fieldhouse, stadium lights and score board.

The estimate does not include an indoor practice facility or expanding the cafeteria at Ledbetter Intermediate.

The school already has $3.4 million on hand for Phase 3.

Law said property assessments for the Farmington School District were $160 million for 2016-17 and are expected to increase to $167 million for 2017-18.

The increase in assessments would generate an additional $123,000 per year election in spring in property taxes for debt service, Law said, giving the district the ability to borrow about $2 million. The school’s debt service for a $1 million loan is $62,000 per year at a 3.75 percent interest rate for 25 years.

A 1.25-mill property tax increase would bring in $208,750 per year, giving the school the ability to borrow another $3.4 million.

This would give Farmington schools a total of $8.4 million for Phase 3, Law said.

He said a 1.25-mill increase helps the District twofold: it provides the ability to borrow more money and it would allow the school to extend its debt service. This offers the school the opportunity to refinance debt in the future, Law said. By refinancing debt and anticipating property assessments to continue to increase, Law said he believes the district would be able to build the indoor practice facility and complete renovations at Ledbetter in the near future.

Voters in the Farmington School District last approved a millage increase in 2006 to build Folsom Elementary School. Since then, Farmington’s millage rate has rolled back 1.25 mills to the current rate. If the board decides to seek a millage increase, it would be asking voters to return to the tax rate approved in 2006, Law said.

Amendment 59 to the state Constitution caps at 10 percent the tax revenue increase that property tax recipients can receive after a countywide reappraisal. When a county’s assessed property value increases by more than 10 percent, governments and schools have to roll back, or lower, millage rates.

A 1.25-mill increase would cost an additional $25 per year per $100,000 of a home’s appraised value.

The board’s choices, Law said, are to seek a 1.25mill increase, seek a larger increase, or not seek a tax increase.

Phase 3 will be built, Law said, but the question will be the timing. Without additional revenue, Phase 3 would have to be built in stages as money becomes available.

“This is one of those things we need to discuss,” Law said.

Board members took the next step for Phase 3. They voted to move forward in negotiating a contract with Kinco Constructors LLC of Springdale to serve as construction manager for the project.

Board members interviewed four firms on June 12, then each board member was asked to rank the firms from first to fourth. Everyone ranked Kinco as the first choice. Other firms were Crossland Construction of Rogers, Flintco of Springdale and Baldwin & Shell Construction of Rogers.

Kinco’s presentation shows the firm has 45 years of building experience, with offices in Springdale and Little Rock. Kinco has been involved in constructing many athletic facilities, including a recreation center at Henderson State University, Rogers Adult Wellness Center, University of Arkansas’ indoor baseball and track practice facility, UA Randal Tyson track facility and Baum Stadium. Other school projects are Eureka Springs High School and South Side Bee Branch Middle School in Bee Branch.

Jeff Oxford, board president, said all four were good firms. Oxford said he was drawn to Kinco because it has built facilities similar to what Farmington is going to build and several employees who would be involved in the Farmington project live in the community.

“I felt really comfortable with them,” Oxford said. “I just felt good about them.”