Aurora Public Schools will turn to the private sector to secure financing for construction of a new school and purchase of mobile classrooms to curb overcrowding, the school board decided in a 6-1 vote Tuesday night.
But the long-term payback plan for the suburban school district depends on voters approving a bond question three years from now.
APS can’t go to voters with a bond issue now because the district’s debt limit is maxed out under current Colorado law until 2016. Instead, the district will borrow $30 million through Certificates of Participation, or COPs, to begin the design and construction of the new school, which will serve preschool through eighth grade. The new school will be located between Interstate 225 and E-470 at 6th Avenue and Airport Boulevard.
The district is expected to pay about $1.4 million annually in interest payments for five years.
The plan, according to district documents, is then to ask voters for a new bond to pay off the note. If voters reject a bond increase at that time, the district would be saddled with principal payments that could triple the annual cost of the loan.
Since 2000, Aurora residents have approved each of the four bond and mill levy questions proposed by APS.
But, “you can’t count on money you don’t have,” said Vice President Cathy Wildman, explaining her opposition to the plan.
While COPs are less common for school districts than bond and mill levy questions, it’s not an unprecedented funding mechanism. APS used a similar strategy to renovate Aurora Central High School in 1988.
More recently, Jeffco Public Schools issued a COP for $8 million to purchase new buses in 2002, said Chief Financial Officer Guy Bellville.
He said public entities use COPs to help spread out payments for larger expenses, much as an individual would use a credit card.
While Wildman was the only ‘no’ vote, she wasn’t the only board member to raise concerns about the what district concedes is a short-term solution, and about how the board arrived there.
The new school will have seats for about 1,000 students. It’s slated to open by 2015.
Two-thirds of Aurora’s elementary and middle schools are at 90 percent capacity or more, including mobile classrooms. The district is projecting its enrollment will climb by 2 percent annually for the next four years.
Several board members encouraged the district to begin examining longer-term solutions.
“We can’t build $30 million schools every year,” said board member Amber Drevon.
Board member Dan Jorgensen reiterated concerns that the plan only addresses one geographical region of the sprawling suburban district.
District officials, citing housing permits, believe the new school will serve the fastest growing portion of Aurora.
Part of the recommendations approved by the board include forming a committee to assess school boundary lines after the new school is opened.
Jorgensen also said he was not happy with how little time the board had to make its decision. The recommendations the board approved Tuesday were offered at the board’s last regular meeting Dec. 3.
The board normally has a six month window to consider major votes like this one, Jorgensen said.
The district began studying the issue and launched its community outreach program in the spring, APS Chief Operating Officer Anthony Sturges told the board.
APS will also use $2.4 million of remaining bond money to design a new Mrachek Middle School. Those funds were originally earmarked for a cafeteria and kitchen renovation at the school.
The cost of building Mrachek would also be a part of the bond question in 2016.