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 Board Sharply Divided Over How to Spend $2 Million

June 10, 2009 - A public hearing last week showed Charles A. Beard School Board members still sharply divided over how to spend possibly as much as $2 million the school corporation expects to get by refinancing debt incurred to build Knightstown High School.

The refinancing will be accomplished by issuing new bonds with a lower interest rate, with proceeds from that bond sale used to pay off an earlier bond issue from 2001. Doing this will give CAB access to $1.265 million now held in a sinking fund, plus, by extending repayment on the new bonds an additional two years to 2024, the school corporation could get, depending on interest rates, another $800,000.

At the end of its June 2 public hearing, the board voted 5-2 to pass two resolutions related to the use of these funds to make certain improvements at KHS and Knightstown Intermediate School. Board Vice President Steve Dalton and board member Mark Fort cast the dissenting votes, maintaining the opposition they had voiced the night before.

By a 4-3 vote, a majority of the board had decided at its June 1 special meeting to spend $1.1 million of the money that becomes available through refinancing on improvements at KIS. The three board members who lost that vote -- Dalton, Fort and Tim Wehr -- had objected to spending that much money on KIS, and, instead, wanted to spend most of the money on new athletic facilities for KHS.

According to the proposed list of projects presented the following night at the June 2 hearing, work at KIS could include the following improvements: replacement of domestic hot water piping ($175,000); heating and cooling work ($450,000); new kitchen equipment ($100,000); parking lot resurfacing ($150,000); electrical work ($100,000); and other, unspecified improvements ($100,000).

The remaining funds would be used for athletic facilities at KHS, including the following possible projects: new softball field ($135,000); track/soccer field ($400,000); concession stand ($110,000); and other athletic facilities (as funds become available).

Dalton and Fort kept the pressure on during last week’s hearing, and continued to oppose spending so much on KIS before a thorough study has been made of the facility. Both accused the four board members who favored spending most of the refinancing proceeds on KIS -- Board President Kevin Knott, Wade Beatty, Leah Kopp and Tom Schaetzle -- of breaking an earlier promise made to patrons.

At meetings held April 21 and 29, the school board faced large crowds of citizens opposed to CAB Superintendent Gary Storie’s recommendation that the board consider closing Kennard Elementary. Fort said at last week’s hearing that the public had been told at the April 29 meeting that Kennard would remain open next year and all CAB schools would be studied, and all options considered, before any school is closed.

“I just want to go on the record and say there was three of last night that voted to keep that promise,” Fort said.

“We said we’d look at numbers,” Dalton added. “We promised to look at other options. … Last night, the four people down here on this end of the table, everyone one of them broke that promise.”

For both Fort and Dalton, spending over $1 million on KIS amounts to a de facto decision to take that school off the table for consideration for closure. If the board were serious about studying all options, both said it made more sense to spend less on KIS at this time.

Fort and Dalton both noted that Mike McKillup, CAB’s director of facilities, had said that $200,000 could be enough to “stop the bleeding” at KIS for at least a year so that a proper study could be made. They also pointed out that McKillup had said KIS could be kept going another 10 years or so for an estimated $568,000 -- about half of what Knott, Beatty, Kopp and Schaetzle voted to spend.

Some of the citizens who spoke at last week’s public hearing, including Kennard resident Jeff Johnson, agreed with Fort and Dalton. Addressing Knott directly, Johnson reminded the board president that he’d previously said he favored reviewing all options before any decision is made to close a CAB school. Having voted to spend $1.1 million on KIS, Johnson asked Knott whether he would really be able to consider that school for possible closure.

Knott replied that he could not justify spending all of the money on athletic facilities for KHS, a position that also drew vocal support from several members of the public and some KIS employees who attended the hearing. However, when Johnson pressed him for an answer, Knott would not say whether he would be able to consider closing KIS after $1.1 million is spent on building improvements.

Noting that the proposed project list approved on June 1 had not included a new football field, Fort asked attorney Jack Hittle if the board could still decide to build one if there ends up being enough money from the refinancing. Hittle said, yes, he thought they could, but suggested the board amend the scope of its proposed projects to encompass other athletic facilities. The attorney also said he didn’t think it would be a problem for the board to alter how the money is appropriated among the various proposed projects.

Despite being on the losing end of the 4-3 vote that approved spending $1.1 million on KIS the night before, Dalton may have secured as much as $140,000 more for athletic facilities than Storie had initially proposed. This resulted from his questioning of Storie’s deduction of the total estimated $255,000 in soft costs and contingency costs from the money that would have gone toward athletic facilities, something that could have reduced the funds available for athletics from about $900,000 to $645,000.

Storie explained that he had taken the soft costs and contingency costs from the athletic projects because his understanding of the board’s vote the night before was that they wanted $1.1 million on KIS, with the remainder going to athletics. If the board wanted to amend the plan to spread these soft costs and contingency costs between the different projects, including those at KIS, he said they could.

Saying Dalton had raised a good question, Knott said he thought a 50-50 split of the soft costs and contingency costs between the funds for KIS improvements and those going to athletic facilities would be fair. Dalton, however, suggested that each proposed project on the list share its own proportion of these expenses, a proposal that drew no objections from other board members.

During an overview he gave at the hearing, Storie said language would be added to the proposed projects list to indicate that other athletic facilities could be built as funds become available. He also said the wording would be changed to reflect that soft costs and contingency costs will be divided proportionately among the various projects.

Former school board member Gerald Leonard asked Hittle if would be possible for one or more board members to change their vote on the proposed projects, perhaps giving an advantage to those wanting to spend more on athletics. The attorney’s response indicated that the battle over how to spend the money CAB gets from the refinancing may still not be over.

“I think that’s exactly what could happen,” Hittle said. “These are elected officials. They’re here to do what they think their constituents want. All they’re doing tonight is defining the broad scope of the projects. When it comes down to voting on actual paying contractors and buying materials, that will be a separate vote they’ll be taking at a later time. Sure, they could change their minds from what they’re doing today. It’s a political system -- they could do that.”


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