Officials: B.G. would survive levy failure

District would face major cuts, but wouldn't be dissolved

By Susan Parrish, Columbian education reporter



Battle Ground levy facts

• Battle Ground has failed to pass a levy 14 times since 1983.

• Last double-levy failure: 2006.

• Last triple-levy failure: 1998.

Current levy

• 2013: $22.6 million, which costs taxpayers an estimated $4.25 per $1,000 of assessed property value. For the owner of a $200,000 home, this costs $70.83 per month, or $850 annually.

Levy request

• 2014: $24.4 million, which would cost taxpayers an estimated $4.49 per $1,000 of assessed property value. For the owner of a $200,000 home, this will cost $74.83 per month ($4 more per month than the 2013 levy or $898 per year -- $48 more per year than the 2013 levy).

• 2015: $25.4 million, for an estimated $4.52 per $1,000.

• 2016: $26.3 million, for an estimated $4.51 per $1,000.

• 2017: $27.3 million, for an estimated $4.46 per $1,000.

Levy request increases

• 2014: $1.8 million more than 2013.

• 2015: $1 million more than 2014.

• 2016: $900,000 more than 2015.

• 2017: $1 million more than 2016.

2012 House Bill 2617

• Became law in Sept. 2012.

• Establishes criteria for a school district to be identified as financially insolvent.

• Authorizes creation of a financial oversight committee to review the financial condition of these school districts.

• Establishes a process by which a financially insolvent school district may be dissolved and annexed by one or more contiguous school districts.

• Establishes dates by which boundary changes must become effective.

Detail of property taxes

Some Battle Ground readers have commented that their property tax bill seems higher than the maintenance and operations levy rate of $4.25 per $1,000 of assessed property value. That's because property tax statements add the dollar amounts for maintenance and operations levy plus a bond issue, also called a debt service rate, which is 96 cents per $1,000 assessed property value. To see a breakdown of your property taxes, visit Clark County Property Information Center.

Some doomsayers have said that Battle Ground Public Schools will dissolve and its students will be absorbed by adjacent districts if its levy doesn't pass on its second try on April 23. But this is not true, say officials with the district and Educational Service District 112.

Double-levy failure and even triple-levy failure isn't new territory for Battle Ground, which has failed to pass levies 14 times since 1983. Even a triple-levy failure doesn't mean dissolution.

A new state law requires certain steps to be taken before a district dissolves.

"It's in everybody's best interest that Battle Ground succeed," said Tim Merlino, chief financial officer at Educational Service District 112. "It's the best for the students, businesses, neighboring school districts and communities."

Merlino was on the committee that worked with the Legislature to develop House Bill 1431, which determines how the state should intervene when a school district becomes insolvent. Before dissolution occurs, a district first has to make an effort to trim its budget to be in the black. If it can't do that, the district must work with a financial oversight committee appointed by the state to turn its finances around. The law wasn't written to compel districts facing difficult times to dissolve, Merlino said.

Reaction to Vader

The driving force behind the bill, which became law in September 2012, was the dissolution of Vader School District in 2007.

After a triple-levy failure and a failed bond to replace a condemned building, the Vader district, serving 80 students, was dissolved and annexed to Castle Rock School District.

It had been nearly 25 years since the last school district consolidation. No clear guidelines were in place regarding what steps financially insolvent districts must take.

"We certainly don't want any district dissolving," said Randy Dorn, state Superintendent of Public Instruction, in January 2012 when the bill was first introduced. "But if it happens, we need formal and agreed-upon terms so the process is as smooth as it can be."

No district in the state has dissolved since Vader.

In 2012, voters in Lyle School District twice rejected a maintenance and operations levy, but the district didn't dissolve. Although the rural district in the Columbia River Gorge serves only 300 students — Battle Ground has almost 13,000 — the state requires that all districts unable to pass a levy follow the same steps.

The Lyle district was unable to produce a balanced budget. But instead of dissolving the financially troubled district, the state placed it on "binding conditions" status intended to improve its financial situation.

Merlino was among those on the financial oversight committee tasked with helping the district reach a balanced budget. First, the committee cut the district's operating budget by 20 percent. Then it worked with the district to trim 14 percent off the twice-failed levy request. That request, brought before voters in February, passed by 58 percent. Soon the district will be removed from the "binding conditions" status.

If the levy fails again

According to state law, a district cannot bring a levy request before voters more than twice in a year. So if the Battle Ground levy fails on its second attempt Tuesday, the district cannot bring another levy request until February 2014. But even if the levy fails next week, it's not time to talk dissolution of the district.

However, the district will have to make deep cuts — to the tune of at least $16.4 million for the 2013-14 school year. That number is derived from the loss of spring 2014 property taxes of $13.4 million, plus the lost levy equalization funds.

Although the district would still collect fall 2013 levy money, it couldn't collect any more levy money until 2015, and that's only if the levy passes in either February or April of 2014.

If the levy fails next week, the district would have to determine which programs and staff would be cut next school year and present reduction-in-force notices to staff by May 15.

The district's new budget must allow it to run in the black without levy dollars or levy equalization dollars, money the state gives to property-poor districts that pass their levies.

ESD 112 would review the reduced budget "to see if it's accurate and doable," Merlino said.

If the district can't come up with a no-levy balanced budget, that's when the state's financial oversight committee would step in. And even at the financial oversight stage, dissolution is not imminent.

"The district has survived many times with a double-levy failure," Shonny Bria, the district's superintendent, said after the levy failed in February.

Voters have until 8 p.m. Tuesday to return ballots.

Levy increases

The 2013 maintenance and operations levy is $22.6 million. The requested maintenance and operations levy is a four-year levy, with the total dollar amount collected increasing annually: $1.8 million more in 2014, another $1 million increase in 2015, a $900,000 increase in 2016 and a $1 million increase in 2017.

District officials say these increases are needed to pay for unfunded mandates imposed on the district by the state or federal government without any money to pay for them. Three unfunded mandates that go into effect next school year will cost the district about $1.2 million. One of these unfunded mandates is a new system to evaluate job performance of teachers and principals.

Tax confusion

Some property owners have called The Columbian wondering why their property tax statement lists a larger amount than the current levy rate. It's because the district's property owners are paying for both a maintenance and operations levy, at a rate of $4.25 per $1,000 assessed property value, and a bond issue, at a rate of 96 cents per $1,000 assessed property value. Property tax statements add the dollar amounts for maintenance and operations levy plus the construction bond issue.

Approved by voters in 2005, the bond issue paid for new school construction and upgrades throughout the district and will be paid off in 2027. The bond issue is called "debt service rate" on the county's website. To see a breakdown of your property taxes, visit Clark County Property Information Center.

Battle Ground Levy Results Feb 2013