The Emporia board of education unanimously approved a purchase agreement that will allow the school district to begin an energy-saving plan in its buildings throughout the city.
The vote came after a presentation by Greg Vahrenberg, managing director of PiperJaffray financial management company.
“Earlier today, we completed the sale of your Qualified School Construction bonds,” Vahrenberg told the board during a meeting Wednesday evening in the Mary Herbert Education Center.
The vote finalized the sale of Qualified School Construction Bonds through certificates of participation. The QSCBs were available through a federal program that provides tax credits to buyers in lieu of payments from the district. The federal government had allotted $79 million to the state of Kansas to distribute to qualified projects in school districts across the state.
The Emporia school district was approved earlier this year to receive a portion of those funds.
The investors who purchase the QSCBs, which are lease-finance agreements rather than traditional bonds, will require that the district pay a small rate of interest to supplement the 6.02 percent the investors will earn on the financial instruments through tax credits. Earlier this year, the credit equivalent had been near 8 percent.
“We were able to lock in a 2.23 percent supplemental ... coupon,” Vahrenberg said. “The supplemental coupon is paid to the investors semiannually. The district will pay that 2.23 percent interest to the trustee, who passes it on to the investors.”
Signature Bank in Kansas City will act as trustee for the financing transactions, which will be paid over a 16-year period. The repayment period has been extended one year since the school board last met.
“It’s actually to your advantage to have a longer period where those funds sit with the trustee before you have to pay off the financing,” Vahrenberg said.
The money paid annually will be held by the trustee and can be invested to earn interest for the school district during the repayment period. Investments cannot be for longer than five-year terms, at a maximum investment-earning interest rate of 4.53 percent. Vahrenberg has projected a 3.5 percent rate.
“If you earn less on average than 3.5 ... you will have a shortfall that you need to cover as you get to the end of that 16th year. On the other hand, if you’re earning more” the overall payments will be less.
He estimated that the district in the end would pay about 1.67 percent, with the earnings factored in.
“That’s a very low interest,” Vahrenberg said, estimating a 5 to 5.5 percent interest rate for traditional bond financing.
He estimated that net savings on the $6.8 million project would be approximately $2.3 million as a result of using the QSCBs.
Board member Amy Scheller asked Vahrenberg to explain why the Sept. 23 presentation quoted the project cost at $6,635,000 while Wednesday’s presentation showed a cost of $6,840,000.
Vahrenberg said that after the Sept. 23 meeting, PiperJaffrey worked with the school district and energy consulting firm on an actual project cost, which came to $6,710,000. The maximum that could be issued is $6,841,000, but since the financing is sold in $5,000 increments, the $6,840,000 figure was used.
“This gives you all of the funds that you’re eligible for,” he said.
If the district does not use all of the available funds, it can repay the unused portion early, rather than carrying the debt and interest over the 16 years.
Heim said that estimates were obtained by the consulting firm, and that the district is talking now with one of the contractors in an effort to reduce the cost of that portion of the project.
The energy project includes replacing a broad assortment of aging equipment with energy-saving boilers, toilets, light fixtures, sensors and numerous other items. Many of them already were on the long-range capital-improvement plan. The project also includes expanding a practice field at Emporia High School to accommodate football and soccer, and installing artificial turf on the combined field. A brokeback track will be installed surrounding the practice field at the same time; the track does not qualify for the special financing.
The board heard a presentation from Village School representatives on a mathematics intervention program that has been used at the school for several years.
Principal Wendy Moore said that the school had the system in place before the district began its reading intervention program.
“We started very basically at third and fourth grade ... We tweaked it over time, and we’ve got it at all grades,” Moore said.
The Response to Intervention project emphasized working with students individually in small groups — approximately three to seven per group — to provide one-on-one support to students at a time when corrections need to occur.
The RTI is used in all elementary schools now may operate differently than the Village system, depending upon resources and student needs, Moore said.
Intervention groups meet for 30 minutes each weekday, except Wednesdays, with students grouped according to the types of errors they make.
The system used at Village includes teachers, plus 13 other aides who can work with each child. The individual attention has produced considerably more success in student understanding and proficiency than having only the grade-level teacher work with groups of 20 students with diverse needs during one session.
“We have found huge success with that,” Village teacher Jill Jones said, describing the results of the small-group sessions. “We saw huge gains in what our kids were able to do, so we’re really excited about that.”
Assistant Superintendent of Teaching and Learning George Abel reported on results of the district’s summer school program. Abel said that English Language Learners attended classes for seven weeks, and non-ELL students had classes lasting four weeks.
Attendance ranged from 84 to 91 percent over kindergarten through grade 12, which Abel said was a good rate; children are more likely to be absent from summer school for family vacations.
Results of assessment tests show that summer school helps prevent the skills regression that commonly happens over summer, both among children with intensive educational needs and those who are considered proficient and do not take summer school classes.
Board member Mike Helbert asked whether that result was a good argument for extending the school year for all children.
“If we’re having that type of regression, shouldn’t this board talk to the public and the teachers about extending the school year another four or five weeks?” Helbert asked.
Abel responded that it is difficult for American students to keep pace with students in other countries because of the time U.S. youngsters spend out-of-class during the summer.
Among the recommendations made as a result of the summer school assessment included purchasing enough math materials so teachers do not have to share, keeping the groups small and skill-focused, and using “Imagine It” intervention guides as an additional resource.
Teachers also recommended starting classes earlier and shortening the time spent on literacy. Board members questioned why literacy lessons would be shortened when the subject seemed to be essential for some district students.
Comments
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Posted by tbluma (anonymous) on October 16, 2009 at 7:59 p.m. (Suggest removal)
Why do we need buyers for this? I thought it money from barry's stimulus pork barrel. It ought to be free.
Posted by tbluma (anonymous) on October 16, 2009 at 8:08 p.m. (Suggest removal)
My typing isn't the greatest.
I'll try again.
Why do we need buyers for this?
I thought the the money was from barry's stimulas pork barrel.
It ought to be free.
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