November Special Meetings

Faulkton Area School District 24-4 Board of Education

Monday, November 27, 2017

4:00 p.m.

The special meeting of the Faulkton Area Schools 24-4 Board of Education was called to order by Board Chairman Ryan Nelson at 4:00 p.m. in the 3^rd Grade Classroom.

Roll call of members present were Kelly Aesoph, BJ Kalkman, Scott McCloud, Ryan Nelson, and Jerry Weyand. Also present were Superintendent Derek Barrios, Business Official Lisa Hushka, Val Ramsdell from the Faulk County Record, Randy Barondeau (previous Superintendent of the Frederick School), Jay Jahnig and Verne Hansen from the FAMC, Toby Morris from Dougherty & Company, the following staff members: Jeremy Demery, Alicia Hammond, Michele Latt, Kathleen Melius, Nikki Melius, Janet Reed, Mary Schlechter, Shae Stephenson, Randy Tisher, and the following district patrons: Gloria Bode, Heather Bode, Tim Bowar, Trevor Cramer, Carrie Deiter, Tammy McCloud Dan Ramsdell, and Tom Strasberg. The pledge of allegiance was recited.

Nelson stated there were a lot of disruptions at the last meeting and that will not be tolerated. Nelson said the time to speak will be during open forum. Nelson told the crowd that if there is any trouble, the guest will be asked to leave.

2017-18.75. Agenda Approval. Motion by Kalkman, second by Aesoph, to approve the proposed agenda. Unanimous.

Open Forum Time. Carrie Deiter asked the board if there has been any talk about using the elementary building for any other space other than the elementary classrooms. Nelson stated there was one HKG option that used the space as something other than an elementary but it needed to be discussed.

Public Finance Possibilities. Toby Morris, Dougherty & Company, was in attendance to speak to the board on the financial options available to the district for a remodel/building project. Morris stated their company does a lot of work with cities, counties, schools and the state. Weyand told Morris the buildings and grounds committee is looking into an elementary remodel project and are curious about funding possibilities and how the Capital Outlay (CO) cap would affect those. Morris stated a building or remodeling project could be funded through the CO fund using certificates or through General Obligation Bonds which would be an additional levy. CO Certificates can be done with a 20-year loan and currently rates vary between 3-3.1%. Morris stated the new CO law, placing a maximum levy cap of $2,800 per student, will be implemented in fiscal year 2021. Once that happens, the district would have to make sure their CO fund could support the debt service. That cap would be $840,000 with 300 students. Hushka informed the board that the district levied $1,131,000 for this school year of which $951,000 of that was actual expenditures and $190,000 of that is General Fund busing expenses. Hushka stated the busing expenses could be spent out of the general fund but that would probably require more opt out funds. The HVAC debt service of $130,000/year will be paid off in March 2019. Morris told the board that they have the opportunity to increase the CO levy to the maximum until the law goes into effect. Doing this could generate approximately $2.7M/year. Weyand stated the district could pay off the remodel project debt in 3 years. Morris stated the architect’s design could take 3 months in order to let bids out but Weyand then said the design is mostly done already. Morris said financing could take 30-45 days. Morris answered Hushka’s question and said if the project is completed in the summer of 2018, the first debt service payment could be due after the HVAC loan is paid off in 2019. Morris stated $3-4,000,000 in certificates would be a yearly payment of $300,000. Morris then discussed the option of having a Construction Manager at Risk hired on the project. He stated he is in favor of hiring one because they assume a lot of the risk because they use a guaranteed maximum price. Morris recommended hiring someone the district trusts and who has experience with schools and to bring them on at the same time as the architect.

HKG Recommendations/Discussion. Verne Hansen, FAMC Board member, first stated he was not here to recommend an architectural firm. Hansen stated he wanted to clear up some rumors about the hospital construction being a mess and a basket case. Hansen stated this is very untrue and invited the board to come in for a tour. Hansen said the only problem they had was that the project deadline was exceeded and that was the fault of the contractor. Randy Barondeau, former Superintendent at Frederick School, stated they hired HKG for their architect and the contractor when they did their elementary addition 13-14 years ago. Barondeau stated their district couldn’t have asked for a better job and were very happy with HKG. He stated they started cement work the end of May and had classes in the building on August 24. He said the following was completed: all elementary rooms, library, band room, bathroom, geothermal heating/ac, and a roof. Barondeau recommended that when the architect gives you the plan, to go through it completely, and get all the input from the staff ahead of time. Barondeau said if this isn’t done the amount of changes will be where the cost overruns happen. Barondeau said they added and deleted some items from the initial project plan resulting in only exceeding their budget by $2,500 (approx. $1.9M project). He stated the district needs to tell the architect what you want and what you want to spend, and they will work for you to meet that goal and stay within budget. Barondeau said their district had saved $1.5M in surplus beforehand and had the loan paid off in 9 years. Barondeau told the board the importance of compromise and selling the idea when planning. Barondeau said their project was a 3 year planning process. The Superintendent talked to teachers about what they thought was important over 3 years. He then told HKG what they were thinking and they worked on the plan. Barondeau said initially the bids came in too high and items had to be cut.

Board Discussion: Weyand stated with the sprinklers and some additional wiring added in, he thought the district could get the elementary remodel project done for $1M next summer and paid off in 3 years before the CO cap is in place. Weyand stated later on a project could be done for the rest of the building. Barrios said he visited with Scott at HKG today and they are wondering if we are hiring them. Barrios stated he is here to support the board in whatever they decide. Barrios said he hasn’t see a formal plan other than the $700,000 one-page estimate. Weyand told Barrios this is just a remodel and pretty self-explanatory. Weyand stated he thought there was a lot of support for getting this part done and paid for in 3 years. Weyand stated he wanted the next step to be getting HKG here to meet with buildings and grounds and the staff to get a more definite cost estimate. He also stated he didn’t think a construction manager was necessary for this project. Nelson stated he would like to see the board take their time and do it right and develop a plan. Weyand didn’t want to lose the opportunity before the CO cap. Aesoph stated she didn’t see what the rush was to get the project done right now. She said the district still has the opportunity to set funds aside now and save for a project once it’s planned. Aesoph said the board will need to pass an opt out again in a couple years and the district needs that to pass to operate. Weyand and McCloud said the roof needs to be repaired now and the patch work recently done won’t last. Barrios asked if we should just do the roof project now. Weyand said this project would get the elementary up to ADA code. Hushka recommended meeting with staff to find out the needs and issues that the building has. Hushka stated she feared placing the same exact classrooms back in the same exact spaces wouldn’t solve any of the current spacing or location problems that have arose by decreasing enrollment and shared support staff. Kalkman asked if HKG is wanting to start charging the district now and Hushka stated she had a conversation with Scott Sikkink from HKG today asking the fees. Sikkink stated HKG’s fee is 7.5% of the total project cost and that amount can be incorporated into the loan. Hushka also asked what the fee would be to get to the point of opening bids, if the board decides not to proceed at that time, and Sikkink’s answer was $25,000. Weyand asked Aesoph if she thought the elementary building was worth fixing up and if she thought it could be used for elementary classrooms. Aesoph said she thought it was worth saving but was still uncertain what was the best purpose for the building. Weyand didn’t think the walls could be moved because they are load bearing. Weyend said he was willing to listen to the teachers but there is a lot of support out there for getting the elementary fixed up now and proceeding with the high school later. Aesoph discussed the need for compromise again. There was an extreme amount of discussion on what was needed right now and the timing and planning of the project, as well as which architect to use. Barrios again stated he is here to work for the board and support the decisions they make. Barrios also stated how important staff “buy in” is on a project like this and he felt the staff needed to be heard. He felt there is a step being missed and he also wants to help the board in being financially responsible. Morris chimed in and recommended having HKG here when the staff meets. Morris said the sooner you can get the architect hired the better. They are the professionals and are working for you to make sure the districts needs are met. Morris said the architect contract can state the expectations of the board and could even dictate a payment schedule. (For example, 50% of the fees are paid at design and 50% at completion.) In the end it was decided to invite HKG here to meet with the teachers, Barrios, Reed, Demery, and the buildings and grounds committee to hear and discuss the building needs, in regard to an elementary remodel.

Open Forum Time. 1. Carrie Deiter stated if she was going to build a house and could not afford the garage at first, she would still have to plan for the future garage onto the house. She said it doesn’t seem like things are being completely thought out. She thought it made sense to look into the future. 2. Barb Schilder stated she thought it was very imperative to include the staff on the planning. She said they are the ones here every day educating our kids. She said, as a farmer, she wouldn’t want the teachers making the plans to build her farm shop. 3. Tim Bowar stated he thinks in this meeting coming up, with HKG and the teachers/staff, that there also needs to be a dictatorial leader of the clock. Everyone at the meeting would have 2 minutes to speak and if the point had already been heard they move on.

2017-18.76. Adjournment. Motion by Weyand, second by Kalkman, to adjourn at 5:45 p.m. All in favor, motion carried.

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Board Chairman, Ryan Nelson Business Official, Lisa Hushka