Board applies for stimulus bond to improve facilities

— Though survey results on a possible millage increase were mixed and indecisive, school board members voted unanimously at Monday’s meeting to apply for a Qualified School Reconstruction Bond for improvements to the district’s athletic and academic facilities.

The bonds are authorized by the American Reinvestment and Recovery Act of 2009 and may be used by school districts to finance qualified school construction projects.

With interest on the bonds paid by the federal government, the loans are basically interest free to school districts, with districts paying a percentage of the bond each year to a trustee and drawing interest on the money held by the trustee during the term of the bond to further reduce the amount which the districts must repay.

In an example provided byDennis Hunt, senior vice president and manager of Stephens Inc., a school district selling a $1 million bond could theoretically only have to repay $760,000 out of its own funds during the 15- to 17-year repayment schedule.

The vote of the board does not obligate the district to proceedwith the bond issuance. If the application is approved, the board can still decide against a bond measure. The vote was necessary on Monday in order to meet the May 31 deadline for applications. Additional information on the amount needed for projects and whatthe district could afford without asking the voters for a millage increase was requested by board members.

Results of a recent survey sent home with students, available online and published in the Courier-Journal were mixed according to Gentry School District superintendent Dr. Randy Barrett.

The survey was taken in an attempt to determine the will of the people in regard to a 1.1millage increase to fund athletic facility improvements in the district.

According to results compiled by Barrett, 55 percent approved a millage increase for athletic facility improvements and 45 percent opposed any millage increase.

“A good block of the people voted no because of the expense (of paying more taxes),” Barrett said. “Others said no because they thought we should do work on the intermediate school first. Some voted no and said we spend too much on sports. Some voted no, saying the school should maintain what it has. And a good group said we should do this.

“Even if we could pass a millage increase by a narrow margin, I’m not sure that we would want to if a bulk of people don’t want it,” Barrett said.

“I’m OK with applying for the bond but not for a millage increase,” said school board member Ted Dorn. “I think we can do it without a millage increase,” he said, suggesting a millage increase be sought only if the district could not keep up with bond payments.

“I would hate to try without a millage increase and then have to go back to the voters and say we already spent the money and can’t pay for it,” Barrett said.

Hunt told board members that they could apply without a millage increase but that the district could possibly be turned down by action of the Arkansas Board of Education because the district was recently in fiscal distress and restructured its existing bonded debt.

Board members askedBarrett to prioritize the list of facility improvements on the 10-year plan and come back to the next board meeting with some numbers to help the boarddetermine how much it can afford to borrow under the stimulus plan.

The bond amount, if approved, would be $1.5 million or less.

News, Pages 1 on 05/19/2010