It took another lengthy discussion — that still ended with pointed disagreement — but Litchfield School Board approved a preliminary levy during its meeting last week.
The action, if given final approval in December, will increase the district’s levy 3.71% for 2024, and is aimed at creating an additional $1.5 million in deferred maintenance funding.
The board’s 4-1 vote — with member Greg Mathews dissenting — followed what was a continuation of one that began in August and was picked up again during its Sept. 11 meeting. The board had been considering using both general obligation building bonds and tax abatement bonds to generate up to $3.5 million in funding that could be used to improve a long-neglected parking lot and the high school tennis courts, as well as other possible parking lot and facility improvements, which could be part of the district’s collaboration with the city of Litchfield on the Litchfield Area Recreation Center project.
Tax abatement funds can be used only for parking lot improvements, while the general obligation bonds can be used for a broader variety of facility improvements as they are essentially “left over” from the building improvement taxing authority that district voters approved in a 2019 referendum.
The School Board authorized a resolution during its first meeting in September saying it intended to issue the general obligation and tax abatement bonds that would total $3.5 million.
“The intent of the resolution was to allow the board maximum flexibility as they consider various site improvement projects across the district until we could be provided with the estimated tax impact of the issuance,” according to a memo from Business Manager Jesse Johnson and Superintendent Beckie Simenson.
That analysis came at the board’s first meeting of September, when Ehlers Financial Management representative Matthew Hammer told the board the district levy would increase 8.24% if it issued the entire $3.5 million in proposed bonds.
That increase, following two failed school referendums seeking funding to build a swimming pool that would have been part of the LARC, had some board members concerned that it could be viewed as a violation of the public trust. Their struggle with that issue led to the board leaving the Sept. 11 meeting without a vote on the preliminary levy.
That meant members needed to make a decision Monday to meet the Sept. 30 deadline for setting the preliminary levy. The preliminary levy is a placeholder, allowing time to review tax impacts and prepare budgeting, with the official levy needing to be set before the end of December. The preliminary levy can be decreased, but not increased before that final decision.
And that led to a debate over flexibility versus messaging.
While no one spoke in favor of the 8.24% increase, board member Greg Mathews suggested setting the levy above the 3.71% increase.
He said multiple times he supported increasing the levy by $1.8 million — $300,000 more than the “left over” $1.5 million from the 2019 referendum — because it offered the board greater flexibility and more time to gather details about various improvement costs.
“We’re not talking about new projects here, like we were the new swimming pool,” Mathews said of a list Simenson provided the board, which gave priority to certain projects. “We’re talking about maintaining what we have. And we have an obligation.
“If we agree to $1.5 (million) … we’re locked in. That gives us fewer options,” Mathews said. “If we don’t need the $1.8 (million), then in our December meeting, we can revise that downwards.”
Board chairman Alex Carlson said he asked Hammer about a 5% levy increase, which would be $1.5 million of general obligation bonds and $700,000 of tax abatement. But Carlson did not offer that levy amount as a resolution.
Johnson recommended the board pursue only the 3.71% increase. The district’s business manager also explained that the tax abatement option could always be on the table for the right project.
“There’s a big difference between the levy process and then as far as the ability to sell tax abatement bonds,” Johnson said. “You always have the authority.”
Waiting to use tax abatement until the costs of an extended and potentially reconfigured south parking lot at the high school were better known would be a better approach, Johnson said.
“I think we can get there,” he said. “I think the key would be to agree to something now, so that we can get into an agreement … we can sit down and talk about all these ideas.”
Waiting to use tax abatement bonds could be slightly more costly, Johnson acknowledged, but that cost could be outweighed by having a clearer picture of the costs of an expanded project.
Still, Mathews said he thought it would be better to have the additional financial flexibility up front, especially since the board could change its mind and set the levy lower in its final decision in December.
“When we were elected to the Board of Education, we know that we were going to be spending people’s money,” Mathews said. “I think what people want is value. I don’t like spending the extra 4% or 8% either. (But) that’s the reality of the situation. I want the time to look at it and get an assessment from a lot of different sources, so we can make an intelligent decision. And I don’t want to be locked down and confined by a certain amount of money, because that limits our options.”
