The Emporia Board of Education approved its budget for the 2009-10 school year and voted to lock in stimulus funds during a short meeting Wednesday evening in the Mary Herbert Education Center.
The board voted 6-0 to approve a budget proposal that has been discussed in board workshops and public meetings over the past month. Board member Glen Strickland was absent.
The budget totals slightly more than $69 million, including local, federal and state funds. It is expected to increase overall property taxes by 1.77 mills. Property-taxpayers in the Emporia school district will share in paying the approximately $6,000 estimated total increase.
Also approved was a “request for allocation of qualified school construction bonds,” which could be coupled with federal stimulus money if the district receives an allocation.
Assistant Superintendent of Business Rob Scheib explained the reasoning behind the request.
“What we’re requesting is bonding authority,” he said. “We would reserve these bonds, and it’s stimulus money. You saw how fast the Cash for Clunkers went away. If we decide to finance part of our energy study, then we want to make sure the money is there. … Basically, it is like pre-authority.”
The board already has recommendations from an energy-consulting firm that studied all district buildings and suggested ways money could be saved through simple improvements to more complex and expensive equipment replacements.
Scheib explained the process that would be used if the district decides to follows through with the recommendations, or a portion of them, and does use the bonds.
“When you take out the funding, what we’ll do is we will escrow money in an account or 10 or 15 years — however long we take them out for — and then at the end of that period, our money will be drawing interest, and then we will make one payment to pay off the bonds,” Scheib said.
The bank or banks that back the bonds will get tax exemptions on the bonds, which is expected to bring benefits for the district, according to Superintendent John Heim.
“So the prediction is we’d actually pay a negative amount for interest,” Heim said. “We’d actually pay off less money than we borrowed.”
Board president Mike Crouch questioned whether the district would be obligated to take out the bonds, or whether that decision could be made later.
Heim said that a full report on the energy audit should be available at the board’s next meeting; the board then can go over items on the list that would be eligible for the type of funding requested. He estimated that the board would be asked in September or October whether to fund an energy project through the method proposed Wednesday evening, or whether it should be financed another way.
The board would not be obligated to complete the bond transaction. Scheib said he expected the term of the bonds to be 15 years.
“There’s no penalty for paying them off early,” Scheib said. “You just draw less interest in your escrow account.”
Member Grant Riles asked whether the district needed to do anything to qualify for participation.
Scheib responded that the financial company the district uses had contacted him on Wednesday to request copies of internal audits for the past three years.
“So, there’ll be some qualifying,” Scheib said.
Heim told the board that the application stipulation most likely to affect the Emporia district is that the district would have to follow the Davis-Bacon Act.
“That means you have to pay union wages, or your contractors have to pay union wages,” Heim said.
The majority of the costs would be in equipment purchases, Heim said.
“It was about $400,000 out of a $6.4 million project,” he said, giving a review of the consultant’s estimate of additional labor costs.
Board member Angie Schreiber moved to approve the bonding proposal and reserve the stimulus money, if it is available to the district.
“If we haven’t reserved the money and we decide it’s a good deal and they’re out of money, then we’re out of luck,” she said.
The proposal passed unanimously.