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Schools Across State Fund Building Projects

May 28, 2014, 5:35 PM by Erich Schaffhauser

Schools Across State Fund Building Projects
ABERDEEN, SD -

With aging school buildings across the state in some districts and others districts running out of room, numerous building projects are either in the works or have been in recent years.

The Tea Area School Board approved a plan to build a new elementary school this week, using money it will borrow against future tax revenue. After multiple attempts, the district didn’t get a 60 percent voter approval needed for a bond issue, which would have funded a larger project.

School districts elsewhere have funded projects in a variety of ways. From Gettysburg to Selby to Ipswich, there are several small schools in the northeast that are working on building projects. Larger districts are building, too. In fact, Aberdeen has spent about $60 million on new buildings and upgrades in the last 15 years.

Central High School sitting on the edge of Aberdeen is less than 15 years old. Voters eventually approved the bond issue that funded a bulk of the project.

"Originally the plan was to build it downtown and we had two failed bond issues. And then on the third bond issue we changed the plan altogether," finance director Tom Janish said.

The district hired a firm to conduct a survey and found out what tax payers would support. After that step, voters said ‘yes’ and will be paying for the school until the mid-2020s.

Aberdeen has also spent more than $30 million on other building projects in recent years. To pay for those, the district borrowed money it’s paying back as tax revenue comes into the district’s capital outlay fund.

"To fit it into the budget and be able to afford the debt payments, we did it gradually over a period of years," Janish said.

In the small town of Selby, taxpayers have been watching the construction of a new $4 million high school. Superintendent Darrel McFarland says the board considered asking voters to approve a bond issue but decided to take on capital outlay debt.

Taxpayers could have gathered enough signatures to bring the issue to a public vote but didn't.

"It was really pleasant,” McFarland said. “I didn't talk to a board member or teacher or anybody that really got any kind of negative feedback."

In fact, feedback from the community prompted the district to add to the project and donors contributed even more, including a gym floor and scoreboards, McFarland said.

Its debt will be paid in 20 years. McFarland says the district has a big enough tax base to take on the project.

Selby also took advantage of a very low interest rate, which could have helped gain public support. It's paying one percent initially. That'll increase overtime but the average rate over the life of the loan will be 2.2 percent.

In Aberdeen, district officials say a $1.7 billion tax base gives them leeway to borrow for big projects.

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