Nevada County Picayune and Gurdon Times Newspaper Archive

Bond restructuring election May 13 for Nevada; no new taaxes being asked for by district

On Tuesday, May 13, patrons of the Nevada School District will be going to the polls to cast their ballots on a millage issue.

The election will be from 7:30 a.m. to 7:30 p.m. at the Nevada school in Rosston.

The issue is a restructuring of the district's bonded indebtedness, and does not involve any new taxes.

Voters will, in effect, be giving the district permission to restructure how the existing millage rate is used. Under an order from the Arkansas Supreme Court, all districts in the state must have a minimum of 25 mill for maintenance and operation (M&O).

Nevada's current millage is 34.8 mill, but only 9 mill is dedicated for M&O, with the other 25.8 mill set up for debt service.

Should voters approve the measure, the district will shift 16 mill from debt service to M&O to meet the court's requirements. In addition, the district will restructure its bonded indebtedness, with the debt life being increased to 23 years.

According to Nevada Superintendent Rick McAfee, Nevada is one of 246 of 310 school districts in the state having to make such tough financial decisions.

The districts, he said, must either raise taxes  with or without a vote of the people  or rework their existing tax structure. The "without a vote" is this: the court rules if district patrons don't approve such measures as restructuring taxes, then the quorum court is to step in and mandatorily raise the millage to the point the district in question has 25 mill for M&O.

For Nevada, such an increase would mean the Nevada County Quorum Court would be forced to raise taxes by 25.8 mill.

This would increase the property tax on a $50,000 house in the district by $80 per year.

Instead, Nevada, McAfee said, is asking to transfer 16 mill in excess debt service to M&O, putting the district at the required 25 mill for M&O.

The M&O budget, he said, pays for teacher salaries, utilities, instructional supplies and equipment along with employee benefits.

To get to the required 25 mill for M&O, he said, the district must shift 16 mill and refinance an existing bond issue those mill are pledged to, according to Cary Smith, vice president of Stephens, Inc., the district's bond holder.

What the district is looking to do, he said, is refinance its 1992 bond issue.

"The millage restructuring will not require any increase in Nevada's millage rate," McAfee said. "It won't cost the taxpayers a cent."

The restructuring, McAfee said, will extend the payments for 23 years and reduce the district's annual payment from $260,000 to $75,000.

The district, he added, will be getting the same amount of money in taxes it currently receives.

"The economy," McAffee said, "is such we can't ask people to pay more taxes. We'll extend the debt, but if the economy improves, we can pay it off early."

The Nevada School Board decided in a special meeting on March 3 to extend the bonded indebtedness 23 years, hold the election on May 13 and not raise taxes in the district.

"The board," McAfee said, "had several options, but decided this would be the best one for the district."

The election, he said, is in response to the ASC's ruling in the Lake View School District school funding lawsuit.

Under the ruling, the court interpreted Amendment 74 to the state constitution as requiring all districts to have a minimum of 25 mill specifically dedicated for M&O.