[Editor's Note: This is part 3 of a multi-article series on the Grant County Commission special meeting on Sept. 26, 2023, which lasted almost three hours. This one continues with a presentation from Silver Consolidated Schools.]

By Mary Alice Murphy

The third presentation on the regular meeting agenda came from Silver Consolidated Schools Superintendent William Hawkins on the state of the schools' finances and facilities.

Hawkins said he began the conversation with community leaders setting up what the schools would do this fall. "I am presenting to any entity that will let me present the state of our facilities and the process on how local funds are generated as relates to maintenance of our facilities and where we are going with our facility master plan. Typically, schools don't communicate with the community on how funds are generated. So, when we develop a master plan, the community doesn't understand the way the schools are funded."

In an overview of his first two years as Silver Consolidated Schools superintendent, he said, at first, he spent a lot of time evaluating the curriculum and setting cultural norms for parents, teachers and the community. He said he learned that the curricula across the schools were not aligned, so "we started the process last year to align the schools, so if a student switches schools the curriculum will be the same."

Hawkins said he and the school board have also addressed safety protocols across the schools, and with input from the parents and students, decided last year to have armed guards in the schools.

This year, the administration is laying the foundation for the curricular and assessment alignment to ensure "we are offering the quality education we want to. We will also align with other state schools. We started strategizing the alignment, with a focus on the students with communication with parents and the community. We also received this year $500,000 for a Innovation Zone grant, as well as $6.5 million for school-based mental health support. We are creating wellness rooms. We have also invested $950,000 for quality of learning. Our Sixth Street Elementary School and Cliff Elementary and High School rank among the top 25 percent in the state."

He noted that Silver High School ranks at 50th in the state, while Cliff is 62nd in the state. "They are above others in the state, but we can do better."

Under General Statement of Facts, Hawkins noted that some of the district's facilities need significant work. "Our challenges include the five-year facility master plan. The facilities that need the most work are José Barrios Elementary, Cliff schools and the Ben Altamirano Sports Complex."

"Silver Schools has a $19-$20 million bonding capacity, but even that is not enough to do all these projects," Hawkins said. "Up to last year, the projected match was 91 percent from the schools. The Legislature last year made an adjustment, so the match is now only 63 percent, which is still a lot. Silver Schools is not currently eligible for a local match waiver. We do not have a mill rate of 10, which is what makes a school eligible for a match waiver. Cobre had a higher mill rate than Silver, so they recently raised their mill rate to 10, so they were eligible for the waiver. Silver's mill rate is currently 5.927 and will go down this year. We are not going to impose an additional 4 mills It is neither reasonable nor advisable.

"One of the points of this presentation is to seek advice from the community on how to address these challenges," he continued. "I'm not asking for action. I'm hoping to have the conversation when there is nothing on the ballot to think about. General obligation bonds that finance schools are able to request up to 5 percent of the assessed value of the schools. We are assessed at $616 million. Silver Schools has the 20th lowest mill rate in the state, out of 89 school districts and is among the lowest taxing districts in the southwest corner of the state. Silver is presently paying off four $5 million bonds, with outstanding debt at about $15 million. Our current mill rate stands at 1.927. But I learned that the county's mill rate for us will go down to 1.923. The district has up to $20-$22 million bonding capacity that could be used in the future, if we successfully pass a bond issue. Right now it's about $19 million capacity, but when we pay down one of the bonds, it will free it up to the $20-$22 million."

He said that schools can generate funding in four different ways. Two are Senate Bill 9 and House Bill 33, which address annual capital improvements for facilities and maintenance. "Every six years I come before the community to approve the continuation of SB9 and HB 33. They are pay-as-you-go methods of funding projects at the schools. It's a 2 mill levy for SB9. It is about 1.5 or 1.6 mills for HB 33. The funds can be used for facilities, maintenance, projects, transportation. Those dollars are generated annually and we are able to spend them during that period of time. The other way to generate dollars locally is through the financed-with-interest-due method. We do a bond, and after voter approval we are able to sell the bonds and a mill levy is created to repay the bonds. The other way for getting a loan is through the Ed Tech levy, which does not require voter approval. The bonds require a repayment structure no longer than 5 years., and the district must have available net bonding capacity. That's what Cobre did to raise their mill levy to 10, so they could qualify for a match waiver. I personally would not create a mill levy this way, because you want to have buy-in from the community. They may have done that."

He showed a graph on Silver Schools property valuation of $615 million for the district at the mill rate of 1.927, which in 2022 generated $1.16 million. Deming has property valuation of $645 million, which with a mill rate of 5.761 generated $3.7 million. in 2022. "Every time I go anywhere in Silver or Cliff, I hear: 'we need to do..., we need to have..., why don't we have?' I wasn't been able to articulate why when I first got here, but this is why. Our schools are maintained pretty well, but what we haven't been able to do is major renovations. Deming is generating more dollars at a higher capacity. Think of it this way, at 1.9, if you had credit card debt of $20,000 and you were paying just the minimum every month, would you ever get ahead? So in 2021, we were at 1.6. Cobre was at 7.24. With our debt service and capital outlay we were at 5.3 mills and Cobre was at 9.59. They were knocking at the door to get to 10 mills, so they did the Ed Tech levy to put them over the edge. We are not. When our 1.927 goes down to 1.923, it will put us at 5.711 and Cobre will be at 10.099."

The total mill rate in the area has Animas at 2, Quemado at 4.42, Reserve at 4.52 and Silver at 5.427. Animas, Quemado and Reserve have one building. "We have eight buildings, so we have a similar tax rate to a 1A school. Tax collected per $100,000 home valuation for Silver Schools is $181and Cobre $283. This isn't to say we should be doing more, it's simply the facts of what we could be doing."

He showed a graph of all 89 school districts by mill rate levy. "Silver Schools is down toward the bottom. We are the 20th lowest mill rate in the state. As you move toward the right you can see how schools smaller than us are generating more funding. As our mill rate drops, I don't know how much farther it will push us down. We were the 12th lowest and may drop down more. What does this tell us? Property valuation has been trending up and will likely continue. However, the cost of construction continues to increase, so it is unclear that increased capacity will allow the district to complete more facility projects. Part of the open dialogue is whether we want to raise the mail levy on a ballot issue in 2024. Talking about enrollment, in fiscal year 2014, Silver had 3,037 students; in fiscal year 2023, Silver had approximately 2,285. We will likely continue to see a decrease unless we have a change in the economy. As the younger grades continue to decrease, the trend will continue with smaller classes up into secondary. It will also likely be seen in Cobre unless of course there's a major change."

He noted that the state funds projects in only the highest rated schools. The schools that rate below 67 percent within the worst facilities will qualify for 37 percent match. José Barrios, Cliff and Sixth Street qualify. The top 350 facilities are eligible for system based funding. "All of our schools are eligible for some matching dollars."

He noted that those schools with insufficient bonding capacity can qualify for more funding if they have a mill rate of 10 mills. Silver does not qualify, but Cobre does.

If a school has fewer than 800 students and at least 70 percent are eligible for the free lunch program, and a need for 50 percent of facilities needing help, and a 7 mill rate, "we could qualify, but our enrollment is too high. Also if you had a growth rate of 2.5 percent or more, and providing you were at your 10 mills you could qualify for more funding. Silver does not qualify. So there is no possibility of reaching out for more funding or waivers."

"In 2017, with support from the community and our 2 mill levy, the school was able to address facility needs," Hawkins said. "We did $24.7 million in projects, but we needed about $93 million to meet all the needs, according to the 2017 master plan. With inflation since then at 38 percent, the remaining $66.5 million has risen to at least $94-$95 million. That does not address anything that will be identified in the upcoming master plan as critical that was not identified in 2017. We do qualify for an additional 37 percent in funding. If we had had that in 2017, we could have completed any additional $12 million in projects."

He noted that the state rewards those with high mill rates because it shows the community is supporting those schools. "The time is now for us to strategically align the districts facility needs with its enrollment and available financial resources to ensure Silver students have access to modern, safe schools with high quality educational programming."

Hawkins said Silver needs to eliminate inefficient operational spending. "Silver will get $37 for every $63 dollars we spend. We cannot control assessed value. We can control principal debt payment, through the amount of revenue available to pay off our debt. We address what is critical. We don't get to our wants. What I need the community's help with is I would like to find a pathway to a mill rate raise and perhaps toward a successful bond election next year. The other question I don't like to talk about but is also important is do we need all the square footage we have for the number of students we have enrolled? Scary question, but it's the time to have the conversation."

District 1 Commissioner and Chair Chris Ponce asked when the last time the state looked at the match amount. Hawkins said last year the state changed the match from 91 percent to 63 percent.

District 5 Commissioner Harry Browne said he would like to see a list of projects that need to be done.

Hawkins noted the master plan is a huge binder, with each school listing its needs, from roofs to HVAC and whether the need is critical or is on the want list.

Browne said he appreciated the potential consolidation of space.

Hawkins said: "We do have candid conversations about it and we have to talk about every aspect."

District 4 Commissioner Billy Billings said he appreciated the in depth presentation.

Hawkins said in December, "we will bring together a committee for the facilities master plan. We will have a group to collect the high critical needs. State funding for curriculum needs does not require a match. And we will get a list for each facility."

The next presentation will cover volunteer fire department needs and requests.

To read the previous articles in the series, please visit https://www.grantcountybeat.com/news/news-articles/80558-grant-county-commission-held-special-meeting-092623-part-1 ; and https://www.grantcountybeat.com/news/news-articles/80607-grant-county-commission-held-special-meeting-092623-part-2 .