If ballot measure passes, what next?

City would have to decide what to do with $18.15 million in unspent bonds

Posted: Thursday, May 20, 2004

If voters approve a ballot measure May 25 to block construction of a high school at Dimond Park, the city will have to figure out what to do with $18.15 million in bonds that have been sold but not spent.

The community will have to decide quickly how to use the funds if it wants state reimbursement. Likewise, Juneau also will have to decide quickly whether it wants to sell new bonds to build a different high school than the currently designed Dimond Park high school.

Why the rush? A window of opportunity to receive state reimbursement of 60 percent or 70 percent for school construction or renovation costs closes Dec. 31.

Voters first approved nearly $50 million in bonds for the Dimond Park high school in 1999, and added $12.6 million in 2003. The project is contingent on receiving partial reimbursement from the state.

The city has sold $23 million in bonds from the 1999 authorization and has spent $4.85 million on planning and design to date, city officials said recently. The expended money is eligible for partial state reimbursement even if a school isn't built, state education officials have said.

Proponents of the ballot measure, which is based on a citizens' initiative, have said they want Juneau to rethink whether it needs a second high school and, if so, what the school should be like in size and programs.

"If the initiative passes, we have a great opportunity to do a better job for students, to design a facility and program that really meets their needs," said Clay Good, a JDHS teacher who is one of the initiative's sponsors.

But the wording of the measure precludes using the 1999 bonds to build any high school, not just the currently designed Dimond Park school, said City Attorney John Hartle in a recent memo to Juneau Assembly members.

The ballot measure asks voters whether the city should refrain from inviting or awarding bids to construct a new high school funded wholly or in part by the 1999 bonds.

Additionally, the city charter prevents the Assembly from changing or negating the effect of an initiative for one year after it has passed.

Hartle said in the memo, "the most prudent course would be to abandon all use of the 1999 bond proceeds for the purpose of funding a new high school."

Because of the bonds' provisions, the city can't simply buy back the bonds that were issued. And even if the bonds aren't used for constructing something, the city still has to pay interest on them.

The city could invest the bond proceeds and use those earnings to pay the interest, but that may not cover the whole debt, said city Finance Director Craig Duncan.

After paying the debt, by one means or another, the city would possess the principal - the $18.15 million - presumably to use for a school construction project, Duncan said.

A more likely result is that the city would use the $18.15 million to pay for school renovation projects now. But Hartle said it would be best to get voter approval before doing even that.

Those projects could include further renovations at Floyd Dryden Middle School, replacing water pipes at Harborview Elementary, and more improvements at Juneau-Douglas High School.

Voters have approved separate bonds for those projects, but the city hasn't sold them yet.

Some opponents of the Dimond Park high school have suggested the unspent bond money should be used to renovate the Marie Drake building next to JDHS and make it part of the school.

Ken Koelsch, a former Juneau Assembly member and a retired JDHS teacher, favors that idea. He'd like to see Marie Drake used for ninth-graders.

"That's where your dropout rate is - between ninth and 10th grades. That's where we have to focus our energy and finances," he said.

The Juneau School Board has said it wants to use Marie Drake as a middle school or to hold administrative offices and other academic programs in the future.

It's up to the School Board, not a few citizens, to decide the use of facilities, said Stan Ridgeway, a Juneau Assembly member and a former School Board member.

The state's year-end deadline for eligibility for reimbursement will be hard to meet if voters want to approve new bonds, such as for a smaller high school, supporters of the Dimond Park school said.

The school district would have from May 26 to Aug. 9 - the date of the last regular Assembly meeting in time to introduce a city ordinance for the October ballot - to redesign a school and garner community support, said Bill Peters, co-chairman of Build It Now, which supports a Dimond Park high school.

"It's taken us five years to get to this point. It's not going to happen," he said.

But Koelsch said, "People of good faith can do almost anything. If it doesn't make the October ballot, you can run (an election) in December."

And Good said the city wouldn't need a complete design, just a concept to submit to the state Department of Education.

For extended coverage on both sides of the issue and related links click here!

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