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Capital Needs and Resources of Nevada’s Public Schools. Nevada Rural School Districts. Paul Johnson, CFO White Pine County School District 1135 Avenue C Ely, Nevada 89301 (775) 289-4851 x125 (775) 289-3999 (fax) (775) 293-0569 (cell) paujohns@whitepine.k12.nv.us.
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Capital Needs and Resources of Nevada’s Public Schools Nevada Rural School Districts Paul Johnson, CFO White Pine County School District 1135 Avenue C Ely, Nevada 89301 (775) 289-4851 x125 (775) 289-3999 (fax) (775) 293-0569 (cell) paujohns@whitepine.k12.nv.us
Nevada Rural School Facilities • Over 1,000 rural school district facilities • Includes multiple facilities on one campus • Includes support facilities (i.e. Transportation, Admin Offices, Storage, etc.) • 9.3 million SF of building space • $1.7 billion estimated value • NPAIP Replacement Cost – Based on appraisals • 47,751.6 weighted students • NRS 387.303 report FY2013 • 15 counties covering 95,587 square miles • http://www.indexmundi.com/facts/united-states/quick-facts/nevada/land-area#map • School ages range from 129 to 4 years
Condition of Facilities • Requested the District indicate conditions as good, fair, or poor. • Received responses covering approx. 74% of school facilities • Approx. 50% of rural school facilities are in need of improvement • This assessment was not based on a common set of objective Arch/Engcriteri
Other Common Demands • Equipment Replacement • Heavy Equipment, tools, etc… • Transportation • School Busses • Fleet vehicles • Maintenance • Technology • School Safety • Facility assessments and improvements as a result of school shootings.
Deferred Costs - Examples • Douglas CSD • $450,000 annual deferred maintenance • $72 million construction/improvements • Other Capital Needs: • Bus fleet replacement – 800,000 average miles • Vehicle fleet – 34% poor or fair condition • Technology • Operations Equipment • Food Services Equipment
Deferred Costs - Examples • White Pine • $10,520,226 in deferred facility improvements • Concrete, asphalt, asbestos abatement, clean and repoint masonry, etc… • 1913 White Pine Middle School Replacement • 1908 David E. Norman Elementary Replacement • Other Capital Needs • $1.4 million bus fleet replacement: Purchased 4 new busses in 2005. Other replacements have been used vehicles from other districts as they have been rotated out of inventory. • $1.3 million Technology/Telecommunications/Internet • $300,000 equipment
Funding Options for School Facilities • Primary source of funding is Property Tax • Property taxes for school facilities require voter approval • Cap on overlapping tax rates limits tax rate access • 11 counties at or within pennies of the cap • Abatement caps limit revenue increases • 10 year rolling average of assessed value growth (one of the factors in calculating the cap) could be less than 1% for many districts in a few years • Other revenue sources are imposed by county commission or legislature – not by school district • Fund to assist schools with capital improvements (NRS 387.333). No funding currently available.
Current Tax Rates and Voter Authorization JNA Consulting Group, LLC
Other Sources • .125% Sales Tax (NRS 374A) • Only available to districts utilizing the Fund to Assist School Districts (NRS 387.3335) • .25% Sales Tax (NRS 377B) • Imposed by county commission • Allocation of funding determined by county commission • Few districts have seen any money in the seven counties levying the tax • Residential Construction Tax (NRS 387) • Imposed by county commission • Must be reviewed every 4 years by Tax Commission • Room Tax (NRS 244)/Real Property Transfer Tax (NRS 375) • Approved by Legislature in 1997 for Clark County JNA Consulting Group, LLC
Availability of Other Revenue Sources Available Prohibited JNA Consulting Group, LLC
Revenue Challenges • Per Capita Taxes do not generate sufficient revenue for demand • Property Tax Base is insufficient to support capital demands of multiple local government entities with competing interests and “allowable” rates.
Construction Challenges • Construction companies have to relocate and pay per diem costs to their workers. • Logistics can increase mobility costs • The long distance can increase costs for even simple jobs. • The freight costs for everything shipped also adds to high repair costs. • Experience difficulty getting competitive bids • Big jobs can exceed local contractor’s bonding capacity • Local vendors can not provide supplies to construction projects so materials must be shipped • Voter Approval
Nevada Studies • 1954 – Peabody Report • 1971 – Governor O’Callaghan Study • 1994 – Legislative Commission’s Subcommittee to Study Public Elementary and Secondary Education (S.C.R. 52 Committee) • 1996 – Legislative Commission’s Subcommittee to Study the Realignment of School Districts (S.C.R. 30 Committee) • 1998 - Nevada School Needs Assessment (ISES Corporation Study)
Nevada Initiatives • State School Construction Relief Fund (1955-1979) • No continual funding source was established and the fund was eliminated. • Account for State Assistance for School Construction (1979-1983) • No continual funding source was established and the fund was eliminated. • Fund to Assist Schools With Capital Improvements (1999 – Present) • No continual funding source established • All of the programs contained specific criteria to qualify for funding and limit state liability • Other legislation has been confined to specific appropriations
Learning Environments • Research has confirmed that there is a consistent relationship between the condition of a school facility and student performance. • The cognitive requirements for learning and teaching are affected by the physical surroundings where they take place • (Do School Facilities Affect Academic Outcomes ?; National Clearinghouse for Educational Facilities; Mark Schneider, November 2002) • The amount of natural light, the indoor air quality and temperature impact student learning • (Prioritization of 31 Criteria for School Building Adequacy; Glen I. Earthman, Professor Emeritus, Virginia Polytechnic Institute & State University, January 2004) • Poor building conditions greatly increase employee absenteeism and turnover that directly affect the quality of education • Growth and Disparity: A Decade of U.S. Public School Construction, October 2006
Impact of Quality Schools • School quality has a direct and positive impact on property values or tax base (Kane et al. 2003); • School quality affects the quality of life and ability to attract businesses and workers (Salveson and Renski 2002); • Investments in the construction and maintenance of school facilities bring money into local economies through job creation and supply purchases (Economics Center for Education Research 2003); • Investments in a community have a multiplier affect that indirectly affects local merchants, local tax revenue, and the labor force. • New or well-maintained school facilities can help revitalize distressed neighborhoods (Local Government Commission 2002) • Environments that are in a well ordered condition may stop vandalism as well as crime (http://www.manhattan-institute.org/pdf/_atlantic_monthly-broken_windows.pdf). • Growth and Disparity: A Decade of U.S. Public School Construction, October 2006
Discussion Points • Each school district has there own unique capital demand and financial hurdles • Existing sources of revenue are insufficient to meet demand • Deferred construction, improvements and maintenance will continue that may adversely affect economic development, property values and student performance • As capital demand continues to outpace funding, more and more capital projects will be deferred making it increasingly difficult to maintain facilities • All school districts regardless of size are financially stressed to meet operating and capital demands • Smaller school districts may never be able to replace or construct school facilities