By MARK A. YORK
Express Staff Writer
The Blaine County School District board of trustees voted Tuesday to borrow $12.4 million through two bond issues by using a federal program called Qualified School Construction Bonds. The program is part of the American Recovery Reinvestment Act of 2009, also known as the "stimulus bill." The federal government issues income tax credits to bondholders in lieu of a school district's having to pay interest.
"This is the way to fund things," said Trustee Kathryn Graves.
The money collected from each bond sale will be used for school improvements for up to three years. Any surplus has to be paid to bondholders then, said District Business Manager Mike Chatterton. Otherwise, the district does not have to begin repaying the bonds until fiscal year 2016.
In an email Wednesday, Chatterton said the first issue of bonds sold that morning with "no problems and sold completely out fast."
He said the second sale, scheduled for Nov. 8, also approved by the board Tuesday, is for an additional $6.2 million.
Voters passed a 10-year $59.8 million plant facilities levy in 2009. The bonds are issued against those future revenues.
At a workshop meeting Friday, Oct. 14, the board heard from principals of district schools on security needs, including surveillance cameras and locking systems on exterior doors. The money will be used for these physical plant needs.
The first of the funds had to be obtained by Wednesday, Oct. 19, the day after the vote, making the Tuesday decision imperative.
"There will be enough time to get the paperwork completed," Chatterton said before the vote.
To participate in the federal program, school districts have to have passed a levy from which to repay the bonds. The money collected can be invested in low-risk interest-bearing securities such as Treasury bonds.
"We can't assume any risk," Chatterton said.
The district has three years to use the money for improvements to the school infrastructure, or it must repay bondholders at that time from any money remaining. In addition, the district can collect interest on levy funds received and not spent, Chatterton said.
Chatterton said US Bank is the trustee in the bond sale. The levy account is at Idaho Independent Bank.
When the funds become available, the district would use 75 percent of the $6.2 million immediately.
There are two scenarios for which the district could use the funding. Both include security improvements—surveillance cameras and door locking systems throughout the district—and venting, heating and cooling system upgrades at Hemingway Elementary School in Ketchum. However, one also includes construction of a new elementary school whose site is yet to be decided and an addition to Bellevue Elementary School. If built, the schools could open in 2016. Should they not be built, the last two years of the Facility Funds Levy would not be collected.
Some exterior doors at the schools can only be locked with an Allen wrench in an emergency lockdown situation. A new system would lock critical entrances by flipping a switch, according to Howard Royal, director of buildings and grounds.
"These are priorities," said Trustee Kathryn Graves.