The Hays USD 489 school board voted Monday evening 4-2 to accept a $2.1 million bid from Bank of Hays to finance the lease-purchase of the Oak Park Medical Complex, 2501 E. 13th, to house Head Start programs.
Board members Greg Schwartz and Sophia Rose Young were the dissenting votes. Board member Lance Bickle was absent.
The district will make a $200,000 down payment on the property and finance $1.8 million at an annual rate of 3.49 percent. Fixed semi-annual payments from capital outlay funds will be $107,973.94 for 10 years, with the total financed at just over $2.1 million.
Superintendent John Thissen said the five property owners in the Oak Park Condominium Association have signed the contracts. He and Bill Jeter, the district’s attorney, will meet to finalize the contracts Wednesday.
The heaviest discussion of the proposal came after that vote, however, on the second agenda item for the special meeting — consideration of the resolution that will be published in The Hays Daily News legal notices.
The wide-ranging discussion touched on property values, the district’s long-range facilities plans, whether or not the public will support any future bond proposal and how many students the project will help.
Superintendent John Thissen attempted a couple of times in the 25-minute discussion to steer talk back to the resolution’s purpose, namely putting the issue before the public.
“It’s an opportunity that you want to take or don’t want to take. We’ve gone through three different votes, we’re at the fourth vote and then we’re going to wait. The question still ends up being the vote for the resolution. Do we put this out to the public? That’s the question,” Thissen said near the end of the discussion.
The resolution passed 5-1, with Schwartz voting against.
The resolution, by law, will be published in the HDN legal notices once a week for two consecutive weeks. Following its second publication, the public has 30 days to protest the board’s decision. The notice is scheduled for publication on Thursday and Oct. 25.
If a petition signed by at least 5 percent of qualified voters from the district who voted in the last general election is filed in the Ellis County Clerk’s office within that time, the purchase would then be put to a public vote.
Ellis County Clerk Donna Maskus, who was out of town at a conference early in the week, confirmed Thursday there were 14,271 people who voted in the 2017 general election from within the USD 489 district. A protest petition would need 714 signatures to force an election.
Thissen has said a special election would essentially mean the district could not meet a June deadline to use a $1.4 million grant from the federal Head Start program to renovate the Oak Park buildings.
As he has since the board voted Oct. 2 in a special meeting to move forward with the purchase, Schwartz spoke against the project, calling it a “hasty decision.”
“It seems like more and more questions have to be answered. My concern is we still have an opportunity to not make a mistake,” he said.
Schwartz has listed among his concerns the lack of an appraisal on the five-building complex. Thissen said at Monday’s meeting the bank will order an appraisal and it should be completed before the 30-day protest period ends.
Board member Luke Oborny said he had discussed his concerns with broker Robert Readle and he was satisfied learning he had a five-year-old appraisal of the property that set its value at $2.1 million.
“That’s probably a fair representation, and to me, it shows the value that we’re getting,” he said.
In the Oct. 2 meeting, Oborny abstained from voting, saying he could not completely support either position.
“For me, it materializes we’re going to get such a great return on this when it’s done. We’re going to have a building worth $3.5 to $4 million and our investment costs are going to be less,” he said Monday.
Schwartz contested that idea.
“Property values, for the most part, since five years ago have gone down, and significantly so, probably between 10 and 20 percent,” he said.
“The other thing is, if we buy that property, let’s say it’s valued at $2 million, the fact we’re putting another $2 million into it doesn’t mean it will be worth that. It will be worth what it’s appraised for, which very likely is still going to be $2 million,” he said.
Changing the use of the facility through renovation could even decrease its value, he said.
Discussion about a bond came to the front after Young asked about comparing the costs of the Oak Park project to last year’s bond proposal that would have repurposed O’Loughlin Elementary for Head Start programs and Westside Alternative School.
That proposal would have cost about $2.2 million.
She also asked how the Oak Park project will fit into the district’s long-range plans for facilities.
The board has not discussed long-range plans or a bond since June, when — on a motion by Schwartz — they voted to table those talks until January.
“Sophia, you asked how does this fit into it,” Schwartz said several minutes later about a long-term plan. “We don’t know because we don’t have one.”
“I don’t know that we don’t,” Board Vice President Mike Walker said.
While the board might not have a full plan, he said, they have discussed moving away from the older, less efficient buildings, expanding Roosevelt Elementary School, renovating the high school and where to move students under different plans.
“I think we do have a pretty good long-term plan. I think this fits into that,” he said.
The uncertainty of any future bond being passed by voters was also a concern for Thissen and some of the board members.
The Oak Park project would allow the district to “walk away,” Thissen said, from two of three buildings that are a liability — the former Washington Elementary and the Munjor school, where Head Start programs are now housed. The third building is Lincoln Elementary.
“There’s two different ways we look at this. I’ve had conversations with you as well, Greg, one-on-one about this. In those conversations it’s a matter of will this public ever support that grandiose plan of $100 million for a new high school, or renovating the middle school. I don’t know. Not right now,” Thissen said.
“The issue I am looking at, and it was partly talking to other board members, is the one thing we can work on is taking care of the greatest liabilities we have, and that ends up being those two buildings that end up being the biggest question mark as to wether or not we want to put money in them in the future,” Thissen said.
“In the meantime, we have $1.5 million on the table that’s being given to us that allows us that opportunity to step away from two of the buildings that’s the biggest liability to us,” he said.
If the Oak Park project is followed through, the Munjor building would revert to the St. Fancis of Assisi parish in that community, while Washington would be abandoned. The 92-year-old building could be sold or demolished.
Schwartz said he was concerned the Oak Park project might convince some voters the district can get money from means other than a bond or that people who disagree with the project might not trust the board to spend bond money wisely.
Schwartz also said he was concerned the Oak Park project would not benefit all students in the district.
“The reality is this building helps 150 students and will never help any more than 150 students,” he said.
He pointed out the addition to Hays Middle School in 2013-14 had a similar cost to the Oak Park project. The eight-classroom addition was about $2.7 million. The district paid $1.4 million with the rest from a grant from the Federal Emergency Management Agency.
“I think you probably would have the same cost to address the lunchroom problem there so kids don’t have to start eating at 10:45 in the morning, and that would help every kid in our district versus 150,” he said.
But board member Paul Adams, who attended most of the meeting via speakerphone and voted on the first agenda item that way, said Head Start is important to the district’s mission.
“I think it’s our mission to be sure that we have the best preparation for every child that’s going to come through, wether those kids come to Hays or go to TMP or Holy Family. That’s our job, man,” he said.
He said Schwartz made good points, but said the focus of the discussion on the resolution was bringing the project to the public.
“If the public disagrees with our decision, the law has made that choice for the people to do that,” he said.
“We have made the decision as a board and we should back it as a board, but I do want the public to step up,” he said.
9:51 a.m. Correction to the five-year-old appraisal amount to $2.1 million.