CLEARFIELD – On Monday night, the Clearfield Area School District Board of Directors passed a reimbursement resolution, affirming its intent to issue bonds or notes for the construction of the high school roof project.
By doing so, the board will reimburse its capital reserve and general fund for any expenditures made during the project. In March, the board must pass a parameters resolution.
Gregg McLanahan, senior managing consultant for the Public Financial Management Group, Harrisburg, presented a “new money analysis” for the project.
McLanahan said the district would have $1,965,000 toward the roof project that’s to be completed this summer. He said they will initially pay for project(s) out of the general fund/capital reserve. However, he said they’ll reimburse the same once financing is completed.
McLanahan said they must first pass a reimbursement resolution. He said it would allow project(s) to be paid for out of the general fund/capital reserve until the financing settles.
He said they would then pass a parameters resolution on the new money series in order to give maximum flexibility on timing of issue.
He said they should apply for a Qualified School Construction Bonds (QSCB). He indicated that the QSCB application deadline is April 1.
McLanahan said the district presently has two options. He said they could opt for a “wrap” structure or a 15-year level.
He said by assuming $1,965,000 in new money in 2010, a “wrap” structure would come with a $218,655 gross interest and a 0.46 net millage.
He said under the same assumption, the 15-year level would result in $697,763 gross impact and 1.53 net millage impact.
McLanahan said his figures came with the assumption that a mill was valued at $118,000.
He said the district has existing local effort in the following amounts: $1,547,475 in June 30, 2010; $1,641,843 in June 30, 2011, 1,647,724 in June 30, 2012; and $973,478 in June 30, 2013.
“(The numbers) stay close and then drop,” he said.
Under “wrap” option, McLanahan said the “Series of 2010 Local Effort” was proposed at $46,489 in June 30, 2011; $55,052 in June 30, 2012; $54,965 in June 30, 2013; $1,014,866 in June 30, 2014; and $1,012,285 in June 30, 2015.
McLanahan said it would result in total local effort in the amounts of: $1,547,475 in June 30, 2010; $1,688,332 in June 30, 2011; $1,702,775 in June 30, 2012; $1,028,443 in June 30, 2013; $1,014,866 in June 30, 2014; and 1,012,285 in June 30, 2015.
Under the 15-year level option, McLanahan said the “Series of 2010 Local Effort” was proposed at $88,852 in June 30, 2011; $180,683 in June 30, 2012; $183,780 in June 30, 2013; $181,491 in June 30, 2014; and $183,800 in June 30, 2015.
He said for this option, the total local effort would be in the amounts of: $1,547,475 in June 30, 2010; $1,730,695 in June 30, 2011; $1,828,406 in June 30, 2012; $1,157,258 in June 30, 2013; $181,491 in June 30, 2014; and $183,800 in June 30, 2015.
McLanahan said once the board learns the QSCB allocation, it will help dictate their proceedings. He said the QSCBs will be awarded in 2010 and again in 2011.
McLanahan said the QSCBs are a new tax credit bond program, which provides a virtual interest free financing to school districts under the American Recovery and Reinvestment Act of 2009.
According to him, Pennsylvania has been allocated $315,737,000 for school districts for the calendar year 2009. He said it didn’t include the school district for Philadelphia, as they received their own direct allocation.
He said the Pennsylvania Department of Education recently issued the final guidelines regarding district eligibility and application process before any QSCB can be issued.
He said 100 percent of the available project proceeds must be used for the construction, rehabilitation or repair of public school facilities, or related site application.
McLanahan said the district’s application must be submitted with a written spending plan for how and when bond proceeds will be used.
McLanahan said applications will be awarded on a competitive basis, using a point system if the program is oversubscribed. He said the point system considered a project’s impact on the following:
– increasing energy efficiency/water conservation (up to 30 points)
– creating/renovating space for high quality pre-school, kindergarten, or reducing class size of younger graders (up to 30 points)
– creating/renovating space for science, technology, engineering and math programs (up to 20 points)
– correcting health and safety deficiencies (up to 10 points)
– opening bids and starting construction in 2010 (up to 10 points).
McLanahan said if PDE faces significant demand, their allocated amounts to individual school districts may be limited.