Lovejoy Schools Opinion

[Brenda]

Informational Meeting Notes - January 13th & 14th, 2003

Greater Financial Risk. Robert Puster stated that separation would be riskier (than consolidation) for LISD if the economy has problems in the future.

Lovejoy proposed school will lose money first 3 years. Robert Puster stated that the board's financial projections were based on today's "best" information but were not a certainty and any predictions which failed to come true would severely impact the financial picture. He said the school budget was "do-able" but that finances would be "extremely tight especially during the transition phase and would remain tight". He projected from his figures the school would run in the "red" for the first 3 years at least and use up $3.5 million (half) of the district's reserve funds. He admitted that in a bad economy, additional reserve funds may be needed.

Incomplete research. The school board never investigated the financial viability of the proposed new school system in the event of either "flat" or "declining" property values. Robert Puster estimated the district might possibly survive 3 years in such a situation. If, after bonds are issued, property values decline, Mr. Puster stated that property taxes could exceed the $2.00 property tax cap.

Incomplete information. Rich Hickman stated that the school board never distributed to the community any information about the benefits of consolidation because they felt everyone already knew how great the Allen educational opportunities were and that Allen was a "known commodity". (Elementary parents and newcomers know almost nothing about Allen schools.)

No tax advantages. Robert Puster stated that although a separated Lovejoy District's property tax rate would be lower than Allen's for 1 or 2 years, they would also be higher for 2 or 3 years longer than Allen's so "there's not a lot of tax difference". He also expects the M+O rate in both districts to move rapidly to the $1.50 per $100 value cap and "remain there for the foreseeable future".

Consultants did not recommend separation. The Moak, Casey report filed 10/02 does not recommend separation. It did say that a recommendation for separation or consolidation would "require additional analysis of the budget implications for each scenario".

Administration & Board pursued separation even though majority wanted consolidation. Mr. Puster stated that the board had conducted a survey of the LISD residents on the subject of separation 3 years ago and found, with 50% of the surveys returned, that the residents were "60-65% AGAINST separation".