The Jordan Creek Town Center isn’t open yet, but school superintendents in Iowa’s fastest-growing county can already hear the mall’s cash registers ringing.
Once the mall, a 2 million-square-foot retail, dining, entertainment and recreation development located in West Des Moines west of the Polk-Dallas County line, is open, school districts serving Dallas County stand to gain at least $6.1 million annually from the 1 percent local option sales tax approved by the various districts’ voters in March 2003. Use of the sales tax money is restricted to construction, renovation or remodeling, and schools can’t use it to fund general operations.
In the Waukee Community School District, whose enrollment is projected to nearly double in the next decade, the sales tax couldn’t come at a better time. The district has the second-highest property tax levy – $17.89 per $1,000 taxable valuation –of any of the 11 school districts serving Dallas County students. The levy reflects building projects in the burgeoning district, which expects to educate an additional 421 students when school opens this fall, bringing the district’s total K-12 enrollment to 4,048.
“Because we are in a sustained growth pattern, we know that we will be in continual construction for the next five to 10 years, just as we’ve been in the past eight,” said Waukee School Superintendent Veronica Stalker. “In the past, we’ve had to rely totally on our voters to pass bond issues. With the local option sales tax, our hope is that we will be able to cash-flow some of our projects and avoid additional bond referendums.”
The district has put bond issues before the public every 18 to 24 months for the past eight years, and district voters have been generous, approving the referendums by margins ranging from 73 percent to 86 percent, a level of support Stalker believes is unprecedented in Iowa. “To get that high a percentage yes vote, you have to have support beyond the parent community,” Stalker said. “Our young families whose children are not in school yet go to the polls and vote yes; our senior community whose children have already been through the schools go to the polls and vote yes. There’s a tremendous outpouring of support for the school every time.”
But such support doesn’t come cheaply, and Waukee earmarks $4.05 of its overall levy to retire debt, more than any other school district in Dallas County. Stalker said district officials are hopeful the sales tax money will keep the debt-service levy static or, better yet, reduce it. “We always worry about the property tax rate and are looking for way to contain or moderate it,” she said. “If we are able to cash-flow future construction, we will require less than the $4.05 to repay the debt. Ultimately, the goal is to reduce the overall tax rate.”
The Iowa Department of Revenue said the Waukee school district stands to receive the lion’s share of the sales tax money – 40 percent, or $2.44 million in fiscal year 2005 – but Stalker said district officials are taking a cautious approach. “We believe the possibility is so broad that to attempt to estimate would be a guess at best,” she said. “We’ve chosen to just wait until we have actual sales revenues to work with. The danger is in overprojecting and overplanning, and that’s a disservice to our community.”
EROSION IN POLK COUNTY RECEIPTS?
The Dallas Center-Grimes Community School District is a double winner. Most of its 1,500 students live in Polk County, which passed a local option sales tax in 1999. The district receives about $1 million annually from retail sales activity in Polk County and stands to receive 5 percent of the Dallas County local option sales tax receipts, or $250,000 a year.
But the school district isn’t banking the money just yet. “It really depends on who you talk to how much new dollar growth we’ll get from Jordan Creek,” Superintendent Gary Sinclair said. Some experts predict a decline in sales in Polk County when the new mall opens, so DC-G school officials are “very cautious in projecting what impact Jordan Creek will have on the revenues we receive,” he said. “When we’ve done projections for projects, we’ve lowered them so we don’t overestimate what the revenue might be.”
Like Waukee’s, the district’s tax rate hovers around $17.50, which is lower than the rate of $18.35 per $1,000 taxable valuation levied five years ago. Polk County sales tax money has been partially responsible for its rate reduction, along with an increased commercial property base gained from a land exchange agreement with the Urbandale Community School District. Sinclair said district officials “believe the ongoing receipt of sales tax money will allow us to decrease the property tax, or at least not increase it when we build new buildings.”
The district is in a steady growth pattern and has construted three new buildings over the past five years. DC-G borrowed against future receipts to build a new elementary school in Grimes that opened in January 2002, but relied on traditional bond issues for other facility needs. In 1999, district voters approved a bond referendum to build a $9.75 million high school that opened two years ago. In 2002, voters approved a $6.4 million bond issue to add onto the old high school in Dallas Center, which will serve as a middle school when classes resume in the fall.
Future plans for the sales tax money include a sports complex at the high school, located a mile west of Grimes. Also on district officials’ radar screen is a performing arts center or auditorium at the high school. As the district’s enrollment grows, additional elementary classrooms could be funded with sales tax money.
The sales tax, Sinclair said, “has been a very positive thing for the district in helping meet facility needs.”
WINDFALL FOR PERRY
Some school districts will be sharing their sales tax receipts with city governments. In Perry, for example, the school and city struck an agreement to share the proceeds 50-50. The Perry school district will receive 20 percent of all Dallas County sales tax money – about $1.22 million, according to Iowa Department of Revenue estimates – and turn half of it over to the city.
The Woodward-Granger, Van Meter and West Central Valley school districts also are sharing a portion of their sales tax proceeds with the cities in their districts. None of those school districts will receive a big windfall from the sales tax, because it’s apportioned according the number of students who are residents of Dallas County enrolled in their schools.
The Perry school board and Perry City Council reached their agreement prior to the 2003 countywide sales tax vote. “It was hanging in the air,” Mayor Alan Shirley said. “There was no certainty the school would pass it, and the cities were getting ready to present a proposal in case the school vote failed.”
Thought the sales tax money hasn’t been earmarked for any specific project, Shirley expects to use it to replenish sales tax money that had been used to keep black ink in the general fund. Retailers in the cities of Perry, Minburn, Bouton and Redfield were already charging a 1 percent sales tax based on previous authorization by voters, but that tax was repealed by the Dallas County Board of Supervisors in preparation for the March 2003 vote. Once the money borrowed for the general fund is returned to the sales tax fund, the city’s future sales tax revenue will likely be used for downtown infrastructure projects, he said.
A school-city committee has been formed to determine areas where the two jurisdictions can under take projects jointly. Shirley said the school board and City Council “have been very cooperative, with a lot of interchange between both parties.”
That wasn’t the case in the Adel-DeSoto-Minburn Community School District, which declined to share the imminent wealth with the cities located within its sprawling boundaries. Adel Mayor Jim Peters took an unusual step of placing a full-page advertisement in the local newspaper asking voters to reject the sales tax proposal because the proceeds wouldn’t be shared with the cities. If the vote had failed, city and county officials were prepared to ask for a referendum on a proposal that would have divided the sales tax among cities, the county and the schools. As a result, though the measure passed districtwide, it failed in DeSoto and Minburn.
Though there is no formal sharing agreement, the ADM school board did vote to help pay for police protection in Minburn, which had been funded with the sales tax that was repealed, and to pay up to $60,000 to help relocate two softball fields from the high school, where a new eighth- and ninth-grade building is under construction, to a city park, Adel Mayor Pro Tem and Councilman Jon McAvoy said.
Shirley McAdon, ADM’s business manager, said the district anticipates receiving $13 million over the 10-year period of the sales tax, “if all works out as projected.”
“It’s going to have a very dramatic effect for ADM because we’re going to be able to build an eighth- and ninth-grade building for just over $9 million, be able to air-condition four other buildings, and not raise property taxes or have a bond issue,” McAdon said.