TMCNet:  EA-WR schools issuing bonds to raise cash

[February 18, 2013]

EA-WR schools issuing bonds to raise cash

WOOD RIVER, Feb 18, 2013 (The Telegraph - McClatchy-Tribune Information Services via COMTEX) -- The East Alton-Wood River School Board has decided to remain focused on a limited number of goals when reviewing its strategic plan for 2013-2014.


At the board's regularly scheduled meeting Feb. 12, members approved the final resolution needed to move forward with the issuance of $1.6 million taxable general obligation school bonds, series 2013. The bonds are being sold privately for the purpose of increasing the Working Cash Fund and providing for the levy of a direct annual tax sufficient to pay the principal and interest.

"This is the final piece," Superintendent John Pearson said. "The sale should close around the end of the month." In consultation with brokers at Stifel Nicolaus, the board has chosen to issue taxable bonds with approximately a 2 percent interest rate and a 10-year payout structure, compared to non-taxable bonds with a shorter five-year payout structure.

"The board is focused on protecting the taxpayer," Pearson noted.

The district previously issued bonds set to retire in 2016, so taxpayers should expect to see an increase of 1 or 2 cents until those bonds are paid off, raising taxes to 40 cents per $100 of assessed valuation. When those bonds are retired, the district will begin making principal payments on the new issuance, and the new tax rate is projected to drop to approximately 14.5 cents per $100 of assessed valuation for the duration of the payment.

The district developed the plan to sell working cash bonds in the fall to address its projected Education Fund budget deficit of $805,631 for fiscal year 2013. Mandated by the Illinois State Board of Education, the School Board must follow a Deficit Reduction Plan, which requires that the deficit be eliminated by the third year of implementation, or June 30, 2016. The plan also calls for $750,000 in Education Fund cuts.

Another strategic consideration is the district's commitment to revising and improving its security and emergency response plan.

"Security has always been a goal, and we're always tweaking our plans," Pearson said. "The tragedy at Sandy Hook sparked that with a lot of school districts, and we have increased the number of our intruder drills with police help in planning and execution." In discussions with the Wood River Police Department, the district has offered the campus to the police for rehearsal activities, honed plans for evacuation and assembly, and instituted the sharing of live streaming video with the Police Department from the school's system.

At the same time, district officials are making plans to move forward with a One-to-One Computer Initiative.

"We're about to make a decision on the device, so we plan to push more training as we enter the spring and summer," Pearson explained. "We're looking at new ideas on how to better engage kids in the classrooms." Proposed training includes webinars and other online resources that promote the sharing of innovative approaches to teaching.

"We would also like to get people in to work with faculty members in small groups on campus," Pearson said. "We would like to get a lot of questions answered and allow for self-reflection before we roll out the machines." To pay for the upgrade, the district has received a school technology grant for $113,000 from the state, which is earmarked to make infrastructure improvements, such as expanding its wireless Internet coverage and increasing bandwidth.

"Another piece of the puzzle is the technology lease levy, which provides $90,000 per year in a dedicated funding source," he said. "The trick is how many machines we can get for that cash flow." Pearson said he also hopes the EAWR Foundation might contribute $10,000 toward this conversion.

Most of the projected maintenance items have been identified through the Health Life Safety survey. One of the biggest components will involve the replacement of the campus's main and peripheral fire panels, which are older models and no longer supportable by pool stations. Pearson estimated this cost between $40,000 and $50,000.

Also necessary, he said, is the replacement of interior doors in the South Building, including the Memorial Gym, and a limited number of doors in the South Building. The board has approved this work, and these projects will be put out to bid in the spring, he said.

Additionally, the district's PBX phone system, like its fire panels, is aging and cannot be supported any longer with spare parts.

"The district is considering two major approaches to addressing this dilemma," Pearson said. "We could buy a new server for $40,000 and keep our old phones, or use an off-site hosting service for a monthly fee, which would require additional cabling of many classrooms and offices and the purchase of new 'Voice over Internet Protocol' phones.

"We have to do something, because we need a reliable phone system," he said. "We need to cost out the options and weigh the pros and cons." kbassett@thetelegraph.com ___ (c)2013 The Telegraph (Alton, Ill.) Visit The Telegraph (Alton, Ill.) at www.thetelegraph.com Distributed by MCT Information Services

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