Wednesday, September 24, 2014

School Board approves bond refinancing, 2014-2015 budget

District will save $5,385 per year for next twelve years

J-E News Editor
Webster County School Board members approved a measure on Monday that will save the district approximately $77,177 over the next twelve years by refinancing bonds issued in 2005.

“It’s very similar to refinancing the mortgage on a home,” said Dwight Salsbury with Ross Sinclaire and Associates. “When we do the refinance on a bond, we don’t extend the bond period. You are basically taking advantage of the lower interest rates that are out there.”
Unlike private citizens or businesses, a school board cannot go to the bank and apply for a loan. In order to generate extra money, a school board must enter into a session of the School Board Finance Corporation,  with the board chairman, vice chairman, superintendent and treasurer acting as officers.
Under KRS 162.385 the School Board Corporation will act as a nonprofit finance corporation in order to issues bond. This is very similar to the way that city and county governments issue money generating bond sales.
The bond measure approved by the board on Monday (dubbed Series 2014) will raise the principal debt amount on the loan from $1,340,000 to $1,430,000, but lower interest rates lower the total debt payments from $1,675,400 to $1,598,223.
The first year of the new bond (2015) the district will save approximately $19,040 by not having to pay any of the principal amount. During the remaining eleven years the district will save an average of $5,285 per year.
At this time the board is still unable to do anything about the Series 2006 bonds issued for renovations to the now closed Slaughters Elementary School. According to Salsbury, bond sales come with an earliest payoff date. For the Slaughters bonds that would be sometime in 2016. Until that bond is repayed, the district must maintain water service, electrical service, heating and air conditioning at the abandoned school.
In other business, the board approved the final working budget for the 2014-2015 school year with a total budget of $20,546,000. According to District Treasurer Brandi Burnett $10,399,000 of that total budget covers the salaries of district employees.
The district’s Support Education Excellence in Kentucky (SEEK) funding, a formula driven allocation by which the state  provides funds to local school districts, continues a downward spiral. In the 2011-12 school year SEEK generated $8,853,846.00, but for the current school year those funds have dropped to $ 8,492,739.00.
The SEEK formula includes transportation costs and special needs students, but it is also strongly influenced by attendance.
“If  Webster County Schools would have improved their attendance by two percentage points, it could have saved the district $75,000,” explained Superintendent Rachel Yarbrough. “We are publicizing each school’s attendance every month. The principals have owned that. It’s every child, every day.”
Webster County K-2 Instructional Supervisor Kim Saalwaechter announced that the district had purchased the ‘Journeys Reading’ series for all students in K-2. The series is part of the Common Core reading curriculum and distributed by publisher Houghton Mifflin Harcourt. 
Webter County K-2 teachers will begin using the new textbooks the Monday following fall break.
“This series and the publisher have been vetted by other schools,” Saalwaechter said. “The components that come with it are what we feel we need in the district.”
Board members approved a payment of $4,116.55 for the ‘95% Construction Phase’ of the Webster County Middle School project to Princeton Lumber Company.

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