R-8 Board votes 5-1 to borrow $8 million to cover "might as well" spending

Paul Barr must have been taken to the woodshed after the June Joplin R-8 Board of Education meeting.

During his explanation of why the school district went into debt, Barr, the district's chief financial officer, talked about $8 million in "might as well" spending that included an additional four tennis courts, articificial turf for all fields, lighting for all fields, and a track so the high school students don't have to go to Junge Stadium.

Paul Barr learned his lesson well. Not only did the words "might as well" never cross his lips, but he never mentioned any athletic construction tonight as he talked about the $8 million debt.

It was all "bathrooms" and educational items, according to Barr and Superintendent C. J. Huff.

For the audience watching Jet 14 at home, it was as if that $8 million had been miraculously transformed into vital educational needs.

And then that darned Debbie Fort ruined the whole thing.

The newest member of the Board of Education attending the meeting (Lynda Banwart was absent) had to bring up the tennis courts, hinted at the other athletic items and asked, "Did we think that we had the money to pay for that?" she said, referring to those who were on the board at the time the decisions were made. "Did we know we were going to have to borrow money?"

That ticked off board member Dawn Sticklen. "Why do you want to know that?" she snapped.

Huff stepped in and noted that Barr had come up with a funding mechanism to take care of the $8 million in debt, or as Barr referred to it, in another comment that will probably send him to the woodshed, "Eight million dollars or whatever the amount of the debt is."

Paul, you just never learn.

Huff added, "We have new facilities everywhere. We have some great facilities."

Sticklen, still bristling over Fort's tennis court remark, said, "You can't have a tennis match with four courts. Why have four courts that aren't going to be used?" That would be silly, she added. "It is an additional expense, but it is an investment."

Board member Randy Steele added. "And we didn't have a track and we didn't have turf."

Board President Annie Sharp agreed, "Yes, it's very expensive. It was over budget, but we got a big bang for our bucks."

She added, "I hope our community backs us in our financial dilemma."

Huff had no apologies for any of the money that has been spent. "We're going to put a bow on this thing and it will be done right."

To pay for the $8 million in debt or as Barr said, "whatever the amount of the debt is," the district will use a form of financing that will allow it to incur the $8 million of debt (or whatever the amount is)  without having to go to the voters.

None of this revealing exchange would have happened if things had gone according to plan. The resolution to use lease certificates of participation was not supposed to come up during the meeting. That, like so many other imiportant decisions the board makes had been relegated to the consent agenda, a number of items the board members vote on as one and never discuss.

That was the plan, but Debbie Fort ruined it, by asking questions about a number of the items, including change orders on elementary school construction work and the financing plan. That forced a discussion, but those who watched at home never learned what "lease certificates of participation" are and how they will affect the district.

As noted in the Turner Report Sunday:

To pay for the spending spree and to get around constitutional requirements that voters get to make the decision on whether a school district goes into long-term debt, the R-8 Board of Education will be asked to pass a resolution authorizing "a sale of series of lease certificates of participation to finance school facilities for Joplin Schools to be accomplished pursuant to annually renewable lease purchase agreement."

Certificates of participation have become a popular financing instrument in recent years enabling municipal government and school districts to incur debt long term by changing it to a year-to-year lease. The instrument was first created in California in the late '80s after the passage of Proposition 13 designed to cut the cost of government made it difficult for California governmental entities to finance construction projects.

While the $8 million in "might as well" spending has been the reason cited for the need for the long-term financing, cost overruns are reportedly astronomical in the construction of Joplin High School/Franklin Technical Center and could also be covered by this financing instrument.

Board members were told that if the amount is $8 million, the district will pay $600,000 a year for 20 years. Fort noted that would be $12 million. After he congratulated Fort on her math skills, Barr compared the arrangement to a home mortgage, and noted that the district would try to pay it back sooner and reduce the costs.

Barr noted that some money could be raised through the sale of naming rights while Huff pointed out that the district would realize savings because the new buildings will be much more efficient than the ones they replaced.

When the consent agenda vote, including the financing plan, was taken, it was 5-1 with Fort casting the dissenting vote.

The vote gives the district's financial adviser George K. Baum and Associates the go-ahead to pursue an offering of the certificates of participation, with at least $8 million in long-term financing and $5.4 million in short-term financing to cover problems because of mining activity on the high school site.
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