South Putnam to save about $200,000

Tuesday, August 18, 2015

The South Putnam School Board approved two resolutions Monday night which will save the corporation up to $200,000.

Last month, the board learned about refinancing the bond for Central Elementary and Reelsville Elementary, the latter of which closed at the end of the 2011-12 school year. The refinancing of the bond would save the school at least $115,000 in interest over the life of the bond.

Attorney John Zeiner said Monday night by refinancing the bond for the administration building at the same time, the school will save an additional $75,000 over seven years, which is the life of the bond.

The savings on the bonds would be generated through a reduction in interest rates. Currently, the school is paying about 4 percent interest on the bonds and refinancing is expected to cut the rate in half.

Financial adviser Steve Meno noted the Federal Reserve is looking to increase the interest rates soon, so starting the process now will ensure cost savings.

In addition, the board approved a separate resolution rearranging the bonds, substituting the locations to get the Reelsville location out from under the loan. Zeiner said as long as there is a lien on the Reelsville property, the school is unable to do much with it.

He noted this substitution will save the school additional money.

The refinancing of the bonds will also include appraisals for each of the locations.

Meno said the savings of about $200,000 to the school between the projects included in the resolutions takes into consideration any soft costs, including the appraisals.

Zeiner added the school would need 50 signatures for a petition in favor of the refinancing. The petitions will be circulated through the board members

Superintendent Bruce Bernhardt said, "Basically, we need 50 signatures of people that say, 'Yes, I want (the community) to save $200,000 in taxes.'"

Meanwhile, Bernhardt informed the board a budget hearing will be held during the regular meeting Sept. 21 open to the public. The budget details will be published in the Banner Graphic.

He stressed the school intentionally overestimates expenditures and expected tax rate for the year, as well as underestimates the estimated revenue coming in. Bernhardt explained the state can cut back the captured tax rate advertised by the school, but cannot give the school more than the advertised rate.

The budget hearing allows taxpayers in the school district to provide input as well as ask questions. Once the public input is received, the information will be forwarded to the Department of Local Government and Finances for review.

Preliminary student count shows South Putnam has about the same number of students as last year. He noted the official average daily membership (ADM) count is scheduled for the Friday after Labor Day.

The General Fund is based on the ADM count, and schools often see a fluctuation of students up to the count day.

In other business, the board approved the designation of surplus property for several items as requested by Technology Director Steve Ricketts. He explained the items no longer had value and the board has to declare them as surplus property in order to be recycled.

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