Elected officials and staff members from the City of Edmond and Edmond Public Schools met this afternoon to discuss potential funding opportunities, primarily focusing on the impact that a potential municipal election authorizing general obligation bonds might have on the city and the district.
As a city, Edmond has never used general obligation bonds — loans backed by the full faith and credit of the government — to finance municipal projects. With council members recently floating the idea, some school leaders have expressed concern that GO bonds from the city could limit the district’s bonding capacity and complicate the politics of passing future school bonds.
While no action was taken during Monday’s two-hour meeting, EPS Superintendent Angela Grunewald discussed the district’s intention to call a bond election for February. Typically, EPS asks voters to approve bonding school projects every two years.
“Right now, we are in the process of putting that together,” Grunewald said. “Our plan is to take to the board for discussion in October and present to them items.”
Asked by Edmond city manager Scot Rigby about the projects that could be included in that bond package, Grunewald said there will “most likely” be an item related to building an elementary school. EPS purchased 80 acres of property at Air Depot Boulevard and Covell Road for $3 million in May 2013 for the purpose of a joint elementary and middle school.
“We do have some elementaries currently that are overcrowded,” Grunewald said. “It’s been nice this year to not expand that overcrowdedness, but we know that the growth on the east side of Edmond is still continuing.”
EPS Board members and staff emphasized the importance of passing bond elections owing to increased enrollment.
“I think it’s important to stress how dependent we are on those bond issues,” said Lee Ann Kuhlman, EPS Board president. “We’ve been fortunate that we have set a precedent that none of our bonds over the last years have been voted down, but we need to keep that momentum going, otherwise our district would not be as successful as it has been.”
Cynthia Benson, EPS District 4 board member, said increased class sizes and district needs have amplified community pressure to pass the district’s next bond package.
“We always have the growth, but I do feel like that (…) if we don’t pass a bond now, it is fairly serious,” Benson said. “Not only is it instruction, but safety and security (…) just the daily maintenance of technology has to be there.”
Lori Smith, the district’s chief financial officer, noted that EPS bonds require a 60 percent supermajority, rather than simple majority.
“We do take that very seriously. We definitely market our bond, what we’re doing and make sure the patrons know,” Smith said. “But it is a little concerning — the shift in attitudes toward public education as well, just overall — and how that could affect bond passage.”
Voters could be asked to approve bonds for city and district
After about half an hour, Jamie Underwood, EPS Board’s District 3 representative, asked whether city leaders intend to call an election proposing GO bonds for municipal projects.
“Could we go ahead and talk about — I feel like it’s the elephant in the room — our concerns about the city having a bond at the same time we have a bond?” Underwood asked. “Could we go ahead and talk about that?”
Edmond Mayor Darrell Davis said city staff and the City Council are still discussing options for “alternative funding,” but he said the city has “options.”
“I’m looking for solutions for alternative funding. I don’t know what that is. It could be a bond, it could be a tax, I don’t know what the answer is,” Davis said. “But right now, whatever we do, I’m not aware of any plan of us coinciding with you all.”
Members of the Edmond City Council have floated calling an election to authorize general obligation bonds for the purpose of funding road infrastructure — among other projects. However, some EPS board members are concerned that if the city chooses to call for a bond election, voters might be less keen to approve bonds for EPS improvements.
“We have one revenue source besides our general fund and besides our state funding. Ad-valorem (property tax revenue) is our only place to go for funding. Like you said, the city, you guys have options,” Grunewald said. “We have concerns about the city running a bond.”
EPS has utilized bonds numerous times over the years to build and upgrade schools, purchase educational materials and make technology improvements. The city has never authorized general obligation bonds before, and thus the city has never leveraged property tax revenues for municipal projects. Beyond potential voter fatigue, an authorized city GO bond package would change the calculations regarding property tax revenue for EPS bonds.
‘Really, really careful’
After Monday’s meeting, Underwood said she hopes the city will communicate with the district on their bond efforts.
“We work with our bond people to keep the millage rate the same. Well, if they have a bond and we have a bond, property taxes are going to go up, and we’re afraid that it would have an impact on our ability to pass a bond,” Underwood said. “If they can work with us and look for an alternative source, that would be great.”
Ward 3 Councilwoman Christin Mugg said the city has more needs for infrastructure and quality of life projects than its sales and use tax dollars can meet. She said a bond election is something the city needs to “explore.”
“But I think we need to be really, really careful, be open and transparent, have conversations, collaborate and coordinate,” Mugg said. “I don’t know where the Council is going to come down on it, but we’ve all just said we need to be in a room together at strategic planning to have these conversations.”
Rigby said the city has numerous needs for infrastructure and quality of life, but limited funding sources to satisfy them.
“There is genuine concern from the school district to say, ‘GO or property tax is so critical to us.’ They’re very protective and that’s rightfully so. We want to be protective of Edmond Public Schools as well. We want them to be successful,” Rigby said. “From the city’s perspective, we have now 100,000 citizens — I don’t want to say 100,000 different interests — but they have many different interests and many different priorities.
“You can’t simply focus on education like the school system. It’s roads, it’s parks, it’s mental health awareness, it’s all these things, and those are great. How do you start to prioritize with a limited funding source, which is sales tax?”