Building, expansion explored at Otsego Schools

5/19/2009

Fresh from the defeat of a 5-mill operating levy and the decision to close Weston Elementary, the Otsego board of education is exploring a plan that would enable it to build a central elementary and expand the junior high - without going to voters.

The school board is scheduled to meet with an attorney from the Cleveland law firm of Squire, Sanders & Dempsey at 6 p.m. May 26 at the board office in Tontogany to learn more about a lease-purchase option that is permitted by the Ohio Revised Code.

"What do they say? Desperate times call for desperate measures," Superintendent Jim Garber said. "The board may need to do something out of the box."

In 2004, Otsego utilized the Ohio School Facilities Commission's expedited program to build a new high school in what was considered phase one of its overall school construction plan. By doing so, it accrued a $13.6 million credit with the OSFC that it could only access by doing Phase 2 of the project. At the time, Phase 2 called for building new elementary schools in Weston and Haskins and renovating Grand Rapids Elementary.

Now, its plans have changed.

With no new local operating dollars, declining state funding, and the need to make more budget cuts, the board decided last week to abandon its original plan and instead try to build a new K-5 elementary at the Tontogany campus, add five classrooms to the junior high for the addition of sixth graders, and eliminate the three existing elementary schools.

Mr. Garber said the new Phase 2 project would cost local taxpayers $5.5 million compared to $12.2 million for the three-school plan. Either way, doing the project is the only way to use the $13.6 million credit from the state.

Given Ohio's financial woes, he said, "The board is real concerned about the $13 million credit we've got out there."

Under the lease-purchase option, the school district would issue bonds and pay them back to the bond holder over 30 years in a loan arrangement similar to a land contract, Mr. Garber said. Without a voted tax issue to make the payments, he explained, the district would repay the loan with money saved by closing three buildings.

"You have to have a plan and what the plan has been in many of the districts that have done it is to use the savings from going from multiple buildings to one building. For example, savings in fixed costs and personnel costs," he explained. "That's one way schools have funded it."

Mr. Garber said the board is realistic enough to know that voters are not likely to support a bond issue for the construction project even though it's estimated to be as low as 1.58 mills over 28 years.

Voters "are unhappy and there is a nasty recession going on," he said. "It's not a good combination."