Approve the recommendation to authorize the Superintendent to prepare a proposal for a referendum for a half-cent school capital outlay surtax. The proposal shall conform to requirements of law, and shall specify the rate and duration of the tax. It shall also specify the projects to be funded and the impact of the proceeds of the tax on the School Board’s debt burden. It is anticipated that these documents would be returned to the Board for action on or after the School Board Meeting of May 16, 2006. This will be after the end of the regular legislative session. The final determination of the impact of legislative action will have to wait until the Governor delivers any relevant veto messages and signs all relevant bills. The capital outlay revenue requirements of the District will be re-evaluated as a result of state revenues provided by legislative action and local revenues provided through Public School Impact Fee increases as a result of the action of the Board of County Commissioners. Should the Board determine that it is unnecessary to pursue a referendum at this time the process can be stopped. Should the Board determine that there is still a need to pursue a referendum the necessary back ground work will have been completed in a timely way.

The School Board has a legal responsibility to maintain a financially feasible five-year capital work plan. In addition recently approved legislation requires that there be a public schools facilities element in the local comprehensive plan. The element must include a requirement that the infrastructure of public schools meet established level of service standards. The infrastructure needed to service new residential units must be in place within three years as prescribed by law.

The passage of the 2005 growth management legislation and its requirements for school concurrency adds demands to and increases the urgency of the School Board’s duty to provide a financially feasible capital outlay plan. The plan must provide new student spaces wherever required throughout the School District. Failure to do so will have a crippling impact on the communities’ construction industry. It must also provide for the proper maintenance and modernization of the existing inventory of schools. This is particularly important because the home building industry has reported that a majority of the growth in the community occurs in established neighborhoods. Most taxpayers live in these established neighborhoods and have a right to the community amenity that an up to date, well maintained public school provides.

Since the passage of legislation, in November 1997, reforming the school construction laws in Florida, the School Board has pursued an aggressive school construction program that is recognized statewide. The district is recognized as a leader in building functional and frugal schools. The Board has used aggressive cost reductions and unique revenue sources such as Quality Zone Academy Bonds (QZABs) and School Infrastructure Thrift (SIT) awards to fund construction.

Every year for the past twelve years, the School Board has also issued additional debt in the form of Certificates of Participation (COP) paid for with proceeds from the 2 mill property tax levy for capital outlay. The Board has also issued bonds that are paid for with proceeds from local government infrastructure sales tax. The Board has grown its debt burden from zero to approximately $1.25 billion. Through these actions the School Board actually eliminated its back-log of needs for new student spaces and school renovations while addressing growth.

The revenue sources used to accomplish this record have been depleted. Shortfalls are now developing in revenue for both new student spaces, school renovations, and modernization. Extensive documents that provide the details of what has been built and how the construction has been funded, including the District’s five-year work plan have been provided to the Board.

Present five-year projections show that construction needs exceed available revenue by approximately $400 million. However, to have revenue available will require the Board to increase its debt burden by another half billion dollars in the next five years. When considering the increase in debt, the real shortfall on a pay-as-you-go basis is $900 million. During the 2005-2006 fiscal year alone, the Board will increase its indebtedness by nearly $150 million. The credit rating agencies have notified the staff and the Board’s financial advisor that further improvements in the Board’s credit rating will not be forthcoming until the debt is reduced.

The Board must either increase its revenue or find other ways to house students in growing areas. One potential source of increased revenue is the School Capital Outlay sales surtax. Should the Board wish to access that revenue source the Superintendent must create the referendum related documents as prescribed by law. The Board must then authorize the School District to go forward with a referendum.

Critical Success Factor 6.a.7 – Provide school facility maintenance that allows for uninterrupted student learning (proper electricity, A/C, etc.) as measured by District Operational Goals plan.

Yes, the cost will be in staff time which is already budged from salary accounts. No additional costs is required for this phase of the project.