The Blaine County School District board of trustees is considering borrowing more than $27 million on future revenues from a 10-year, $59.8 million plant facilities levy approved by Blaine County voters in 2009.
If approved by the board, the $27 million committed in construction bond debt would absorb most of the money collected, at $5.98 million per year, in the final five years of the levy.
In three previous board actions in 2010 and this year, the board approved borrowing a total of $15 million to fund an aggressive building campaign from future levy collections. The board unanimously approved borrowing another $5.97 million Tuesday night and will consider another $6.23 million at a special school board meeting starting at 6:15 p.m. Monday.
District Business Manager Mike Chatterton said Wednesday that he will not ask for board approval at the Monday meeting, but will explain the proposal for future consideration.
Chatterton said borrowing on future levy revenues is economically advantageous to the district because the bonds are being sold through a special U.S. government program that frees the school district from paying interest. Also, Chatterton said the district can collect interest on levy funds now being received but not spent.
Approval to borrow on future levy funds was granted in 2010 in Blaine County 5th District Court in a process referred to as "judicial confirmation."
At Tuesday's meeting, the school board approved offering another $5.97 million in construction bonds for sale, which would bring the total borrowed to date to $20.97 million.
That funding has been used in an ambitious building campaign that is still underway. It includes geothermal resource development and heating, venting and air conditioning retrofits at Carey School, Bellevue and Hailey elementary schools, Wood River High School and the district-owned Community Campus in Hailey. All five facilities were also fitted with new lighting systems and new drop ceilings.
The funds have also been used for a new Bellevue Elementary School multi-purpose room, a new district storage and maintenance facility being built on Aviation Drive in Hailey and for new fire suppression systems at the Community Campus, Carey School and Bellevue and Hailey elementary schools. The funds would also be used, if approved by the board, to remodel the auditorium at the Community Campus.
Chatterton said the additional $6.23 million he'll discuss with the school board on Monday would be used to fund site improvements at Carey School, safety and security upgrades throughout the district and heating, venting and air conditioning system retrofits and other improvements at Hemingway Elementary School in Ketchum.
Borrowing on future levy revenues is being accomplished through a U.S Treasury program created by the American Recovery and Reinvestment Act of 2009, often referred to as the "stimulus bill." The program allows school districts throughout the United States to sell Qualified School Construction Bonds for building repairs and construction purposes. Instead of collecting interest on the bonds, lenders receive federal tax credits.
The program allowed tax credits for $22 billion worth of bonds nationwide in 2009 and 2010 for school construction projects, with Idaho's share being $74 million. The program allows unused funding to be carried into 2011.
The School District has appointed Seattle-Northwest Securities Corp. to handle bond sales and has hired the Boise law firm of Hawley Troxell as bond counsel.
At Tuesday's school board meeting, Hawley Troxell attorney Nicholas G. Miller said tax credits are still available for bond sales in Idaho because many school districts have been unable to get bond issues approved. Districts do not qualify for the Qualified School Construction Bond program unless they have an approved bond or levy to repay the money
Eric Heringer, a senior vice president with Seattle-Northwest Securities said the district will have to start repaying the bonds in fiscal 2016.
"If the district's going to borrow $5 million, you only have to pay back $5 million," Heringer said.
Terry Smith: firstname.lastname@example.org