School districts to realize substation tax windfall
TONY BROWN/DAILY FORUM
New construction associated with the still unfinished Mullin Creek Substation south of Maryville, pictured, means that two Nodaway County School districts will see a fiscal windfall this year thanks to a significant increase in assessed valuation within the property tax category for “railroads and utilities.” South Nodaway R-IV and Nodaway-Holt R-VII plan to invest the one-time revenue boost, which will likely accrue over the next two years, in capital improvements. South Nodaway will also use some of the money to reduce debt load.
The Nodaway County Commission convened its annual property tax hearing during Wednesday’s regular session.
As expected the county, which operates largely on motor fuels and sales tax income, left property tax rates unchanged and will collect 12 cents per $100 of assessed valuation for debt service, utilities, and maintenance related to the Administration Center.
Also approved at the existing rate was the 5-cent per $100 levy that provides revenue for the Senior Citizen Fund and the Senate Bill 40 Fund.
Senate Bill 40 refers to the Missouri law that allows counties to collect taxes earmarked for the operation of sheltered workshops, group homes, and other services benefiting people with cognitive and developmental disabilities.
While the county’s tax rates will remain the same in 2017, Nodaway’s total assessed valuation has increased $10.4 million due to new construction associated with the Mullin Creek Substation south of Maryville.
The still unfinished substation is part of the Midwest Transmission Project, a high-voltage power line initiative undertaken jointly by Kansas City Power & Light and the Omaha (Nebraska) Public Power District.
Work at the site raised this year’s county railroad and utilities assessment from $24.6 million to $35.4 million, a hike that will provide a one- to two-year fiscal windfall for a couple of local school districts, South Nodaway R-IV in Barnard and Nodaway-Holt R-VII, which operates a high school and middle school in Graham and an elementary school in Maitland.
South Nodaway Superintendent Johnnie Silkett said Wednesday that the substation added nearly $8 million to what would have been a $15.8 million assessment for the district, a figure that stands instead at $23.8 million for an increase of just over 61 percent.
Last year’s R-IV assessed valuation was $14.5 million, Silkett said.
The increase means the district, which has a budget of around $2.6 million, will realize $535,000 in new money during the coming year, all of which, Silkett said, will be used for one-time expenses rather than operational costs.
The superintendent said $70,000 of the windfall will be used to pay down principal on bond debt incurred to build an addition onto the Barnard school building, which was expanded after the closure a couple of years ago of an aging elementary facility in nearby Guilford.
Another $150,000, Silkett said, will likely go for construction of a new baseball field at the former Guilford school site, where the district hopes to break ground this fall.
Final decisions have yet to be made, but it is likely most of the rest of the new money will be deposited in the district’s capital projects fund with an eye toward new construction sometime in the future. Creating a capital improvement nest egg, Silkett said, means that a major facilities initiative, as yet unnamed, could probably be carried out without a tax increase.
The increased assessment will not penalize district patrons, and R-IV’s operations levy has actually decreased from $5.27 per $100 of assessed valuation to $5.21. The debt service levy, at 59 cents, remains unchanged from the current year.
As for Nodaway-Holt, Superintendent Karma Coleman said the substation has increased R-VII’s assessed valuation from $17.9 million to $20.3 million in Nodaway County and from $8.35 million to $12.2 million in Holt County, or a little more than $6 million altogether.
In terms of new money, Coleman said that translates to about $240,000 added to an annual budget of between $2.75 and $3 million.
Like Silkett, Coleman said most of the money will be used for capital expenditures, possibly a remodel of the high school kitchen or any number of smaller improvements on either campus.
Under the new valuation, taxes will decrease slightly for R-VII patrons, with the operations levy falling from $4.30 per $100 of assessed valuation to $4.28 and the debt service rate declining from $0.897 to $0.888.
Both superintendents noted that increased tax revenue associated with the substation is based on the facility’s status as new construction. Once the installation goes online, it will be assessed on a countywide basis, meaning that any increased revenues will be spread out among the seven Nodaway school districts and other taxing entities.
So while the two districts are getting a bump this year and, to a lesser extent, probably next year as well, the substation’s impact will recede in the future.
Other than the significant increase in the railroads and utilities category, assessed values for Nodaway County varied only slightly for 2016.
Real estate values, including residential, agricultural, and commercial property, rose from $207.4 million to $209.9 million. Personal property values actually fell from $84.5 million to $81.7 million.
Total assessed valuation rose from $316.6 million to $327 million.
In respect to the county’s budget only, which excludes spending by schools, the ambulance district, volunteer fire and rescue districts, and other taxing entities, revenue projections total $392,425 for the Administration Center and $163,510 each for the Senior Citizen and Senate Bill 40 funds.
