BENTONVILLE : District tries to forecast growth
Posted on Sunday, November 4, 2007
The Bentonville School Board can’t be blamed for wishing it had a crystal ball.
Its members are in the midst of debating whether to ask voters in March for more than $ 200 million in additional taxes to build new schools, upgrade old schools, and fund technology upgrades and maintenance and operations.
The headline-grabbing part of the potential proposal is a whopping $ 99. 7 million for a second high school. There’s also another $ 84 million to open five other schools by 2015.
Most members of the Bentonville School Board say the need for a millage increase to build the new schools is real.
And the need seems to be pressing.
Bentonville added 841 new students this year — more than any other district in Arkansas. The year before the district added 1, 011. Just under 900 students moved into Bentonville schools in 2005.
The district is on pace to run out of space at all levels within five years even if annual growth drops below 600 students. New enrollment hasn’t done that since 2002.
These same board members, however, acknowledge that this isn’t the most opportune time to make $ 200 million decisions based on growth forecasts in Northwest Arkansas.
Growth in all four of the region’s major school districts declined significantly this year. Job creation is declining and construction is slowing. Some board members wonder whether a slowdown in Wal-Mart’s profitability will impact future enrollment growth in Bentonville.
School leaders — for the first time in this booming district’s recent history — have had to ask the question: “What if the bottom drops out ?” “It’s not going to be easy to make these decisions,” said Doylene Fuqua, a former Bentonville teacher and a decade-long School Board member. “We’re trying to look into a crystal ball.” DRAMATIC GROWTH If it seems like Bentonville builds a new school every year, it’s because, in recent years, it has. Cooper Elementary, billed as the largest elementary in terms of square footage in Arkansas, opened this year in Bella Vista. Last year the district opened Centerton Gamble Elementary and Barker Middle School. And its addition of 300, 000 square feet to the high school was larger than many high schools. Central Park Elementary at Morningstar opened in 2005. Jones Elementary opened in 2004.
Like that of its neighbors to the south, Rogers and Springdale, Bentonville’s enrollment growth drove the need for new schools.
Bentonville had 5, 826 students in 1996. The state’s sixth-largest school district now has 11, 959 students.
The increase in the percentage of student growth is even more striking.
Between 1997 and 2007, Bentonville grew an average of 6. 8 percent annually, according to district documents.
It grew at a 10 percent clip between 2004 and 2006.
The growth forced administrators to transfer hundreds of students out of their neighborhood schools, and there are seven portable classrooms in Bentonville this year, including four at Lincoln Junior High School. They’re visible from Superintendent Gary Compton’s office window in the nearby administration building. “Yes, I stare out at that every day,” he said. “They aren’t very pretty, but they serve a function.” LOOKING AHEAD This historic growth led to the formation of a 60-member task force in the spring. One of the group’s key charges was to estimate the potential for growth in Bentonville and come up with a plan to handle it. The group’s conclusions, presented to the School Board for the first time Oct. 15, were eyepopping.
Assuming enrollment grows 5 percent annually, below the last decade’s average of 6. 8 percent, the district will need six new schools by 2015 — three elementary schools, and one middle, junior high and high school.
That number grows to 12 by 2020. That includes six elementary schools, two middle schools, two junior high schools and one high school.
The first wave of new schools, including the high school, needs to open by 2010 to have space for all the students expected to come.
If the district grows by 7. 5 percent annually — or the “Oh, lord” numbers, as Compton calls them — Bentonville will need 21 new schools by 2020.
That’s 12 elementary schools, four middle schools, three junior high schools and two new high schools.
The district would need to build a new school in 11 out of 12 years between 2009 and 2020. The projections often call for adding multiple schools each year.
The board agreed at an Oct. 25 session to work off the more conservative 5 percent projections, if only for piece of mind.
“Imagine building a school every year,” said board Vice President Beth Haney. “I think many of us thought that’s just unbelievable.” ESTIMATING COSTS Building new schools costs lots of money, however, and the School Board says it doesn’t have enough. A millage, or tax rate, increase is needed to cover the cost. Bentonville could then issue bonds to borrow money to build the schools, and repay the money over about 30 years using the proceeds from the tax hike. No one knows how much of an increase the board might ask for. It’s unclear because the group isn’t settled on the building campaign’s total cost.
This will vary greatly based on whether the board endorses the task force’s proposal to build the $ 99. 7 million second high school.
Cheaper options include adding onto the existing campus or converting an existing school into a high school.
Bentonville financial adviser A. V. “Buster” Beardsley III, president of First Security Beardsley Public Finance, said the option of restructuring the existing millage also could influence how many mills would need to be added to generate sufficient capital.
The School Board will debate the issue Nov. 20.
It is simple, however, to say how much adding one mill to the rate would increase taxes for the owner of a $ 100, 000 home, Beardsley said.
One mill generates $ 10 of taxes for every $ 10, 000 of assessed valuation. A property’s assessed valuation is equal to 20 percent of its appraised value. That means the assessed valuation of a $ 100, 000 home is $ 20, 000. So the owner of such a home pays $ 20 in tax per mill.
If the School Board asks for four mills, for example, the owner of the $ 100, 000 home would pay $ 80 annually in additional tax.
Bentonville currently has a millage rate of 40. 3.
The district ranks second in Benton County behind Pea Ridge, with a millage rate of 42. 8, according to the state’s most recent millage report released in April. Gravette had the lowest millage rate in the county at 35. 4.
TIMING AT ISSUE There is consensus that the School Board will need to ask for a millage increase, said board member Marshall Ney. The key question is when. Ney, and most other board members, argue the district needs the money to start building now. The need for more space at the high school is driving the sense of urgency, said board President Travis Riggs. The 5 percent projections say a second high school is needed by 2010. That’s when enrollment will exceed the current high school’s 3, 600-student capacity. Current enrollment is about 3, 100.
While that may seem far away, a new high school takes three years to design and build.
As Compton put it, Bentonville should have “started yesterday” if board members expect to open a new high school in 2010.
March is the earliest the board can legally take a millage question to the public for a vote — a plan most board members say they currently favor.
“There’s no question it’s a difficult decision,” Ney said. “I just don’t feel there are any legitimate alternatives.” Board member Joe Falcon disagrees.
He favors putting a millage question on hold for another year.
What if Bentonville’s dip in enrollment growth this year is the beginning of a trend, Falcon wonders. What if larger dips in other Northwest Arkansas districts spread to Bentonville ?
Springdale grew by only 316 students after adding 1, 000 the previous two years.
Springdale’s previous plans to open a new elementary school next fall were shelved because of the decrease.
Rogers added 249 students this year. Fayetteville lost 90.
Economic indicators also hint that population growth, which drives increases in student enrollment, may slow in the future.
New home construction has slowed substantially in Northwest Arkansas, said Kathy Deck, director for the Center of Business and Economic Research of the Sam M. Walton College of Business at the University of Arkansas at Fayetteville.
If new home construction completely halted today, there still are enough unoccupied homes in the region to meet demand for 42 months, Deck said.
Perhaps more telling are declines in job growth.
The Fayetteville-Springdale-Rogers Metropolitan Statistical Area added an average of 550 new jobs per month over the past five years. Job growth peaked at 650 new jobs per month in 2004 and 2005.
That’s down to an average of 470 new jobs per month this year, Deck said.
That’s still healthy growth, but the market is clearly changing.
Falcon is most concerned about the future of Wal-Mart Stores Inc.
H. Lee Scott, president and chief executive officer of the Bentonville-based retail giant, said Oct. 24 that the company hit its “low point” in the second quarter that ended Aug. 31.
Sales in stores open at least one year were up only 0. 8 percent in that quarter.
As Wal-Mart goes, Falcon said, so goes Bentonville.
The board must vote by January if it wants to ask for the millage hike in March.
That’s just too quick for Falcon, especially considering that the board hasn’t debated whether to add high school space through a second facility, or go with a cheaper option.
“I’m a very conservative person by nature,” Falcon said. “When I have the ability to take my time and weigh all the factors and all the evidence, I make better, more informed decisions.” Requesting the millage doesn’t mean the board is forced to build all the schools, though.
Assuming it’s approved, the district would sell bonds only when it needed the capital to build new schools, said Beardsley. If enrollment growth slowed or halted, the board could opt not to issue new bonds to finance new schools. While the School Board is legally bound to continue collecting the extra tax from the millage hike, it can use the money to pay down its existing bonded debt, Beardsley said. It could then effectively return the funds to the taxpayers by reducing the district’s maintenance and operations millage. That requires voter approval, though. “But what’s the likelihood the voters will say ‘No’ to reducing their tax ?” Beardsley said. If only the School Board had a crystal ball.
To contact this reporter: jkrupa@arkansasonline. com
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