The Journal Gazette
Wednesday, March 16, 2016 12:36 pm

School districts dodge spending referendums


When Center Grove wanted to borrow $40 million to renovate three schools, taxpayers didn’t vote on the projects because the law doesn’t require them to.

Under Indiana law, school districts have to ask voters for approval of any elementary, middle or high school construction project that will exceed $10 million.

But Center Grove was legally able to break up the construction projects, borrowing $10 million each for renovations at Center Grove Elementary and North Grove Elementary schools, and $20 million for renovations at Center Grove High School. The high school project falls under a previous $20 million limit because the school district filed plans before the law changed in 2013, Indiana Department of Local Government Finance director of communications Jenny Banks said.

The school district followed the law, including by advertising public notices before any of the construction projects were approved and conducting public meetings. Residents had opportunities to voice their concerns at the meetings and had the option of challenging any of the projects with a petition drive, Superintendent Richard Arkanoff said.

"I think it’s very fair, because it follows the process of the law," Arkanoff said.

Center Grove also borrowed $2 million for security upgrades throughout the school district and also is planning to make about $2 million in renovations that will include new classrooms at Pleasant Grove Elementary this summer, and officials want to upgrade Sugar Grove Elementary in 2016. None of the projects are significantly increasing property taxes for residents because other debt is being paid off, school officials have said.

"We wanted to make sure we were being fiscally responsible, and that was a good way to do that with balancing the debt," Arkanoff said.

Center Grove isn’t the only local school district that’s planned multimillion-dollar construction projects that didn’t require a vote from taxpayers. In the past year, Clark-Pleasant and Nineveh-Hensley-Jackson schools planned and approved projects renovating athletics fields and adding classrooms. The projects for both districts came in under the $10 million referendum cap.

State lawmakers could consider tightening referendum requirements if school districts or other government agencies are consistently planning and paying for building projects that voters don’t have a chance to approve, State Rep. Woody Burton, R-Whiteland, said. But right now there’s nothing stopping schools from doing multiple building projects that don’t require referendums, Burton said.

"It may be something that would have to be revisited," Burton said. "But if it is the law, and they’re abiding by the law, then they’re allowed to do that."

A school district such as Center Grove, which has multiple building projects happening at once, has essentially found a way to operate as efficiently as they can within the law, Burton said.

"Anytime there’s a guideline put down, smart, intelligent people are going to look for ways to get the maximum out of that guideline," Burton said.

As Arkanoff spoke with parents about a proposed redistricting plan, he also explained why now isn’t the time to build a new elementary school.

A new school would cost more than $10 million, which means taxpayers in White River Township would vote on whether to pay for the project, and there’s no guarantee the majority of residents will vote yes, Arkanoff said.

One of the biggest challenges school districts face when asking for voters’ approval is convincing everyone who lives in the area how a project can benefit a community, including those who don’t have kids, Arkanoff said.

"We need to find ways to educate them on this value, and the need when and if we ever ask for a referendum," Arkanoff said. "All of those things, that’s a challenge to communicate to 40-plus thousand people."

Arkanoff also is concerned about the change in the law, lowering the cap for high school construction projects to $10 million. High schools are often larger than other school buildings, which means maintenance and repair costs, such as updating the heating and air conditioning system, could exceed the cap, he said.

"We’ll just continue to work in the scope of the law, and make the repairs and maintenance we can under the borrowing parameters that we’ve been given," Arkanoff said.

Schools need to be able to spend money to make moderate repairs, upgrades and expansion to their facilities, and the point of the state’s referendum law is to ensure schools and other governments are always thinking about the smartest way to pay for those projects, Burton said.

For example, if officials start considering what to do about a decades-old building that’s beyond its prime, someone will eventually pitch building a new school, which could easily cost $25 million, Burton said. But if officials know that they’ll need taxpayers to sign off on such a project, they may be more inclined to consider a less expensive project, he said.

Taxpayers can still challenge a school building project, even if they’re not asked to vote on it.

Last spring, the Nineveh-Hensley-Jackson school board approved constructing a new 53,600-square-foot wing at Indian Creek Intermediate School for the school district’s youngest students. Voters didn’t have to approve the project, since it costs less than $10 million. The project came about five years after voters overwhelmingly turned down a $26 million plan to build a new elementary school and renovate and expand the high school and intermediate school.

Over the summer, 100 Indian Creek residents filed a petition challenging the project. That was the start of a 30-day petition race where the project’s supporters and opponents had to collect as many signatures as they could. By the end of the race, 1,605 people had signed the petition in support of the project, while 90 people said they were opposed to the construction, and the project was allowed to move forward.

Indian Creek officials hope to have the new wing constructed by the start of the 2016-17 school year.

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