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Auditors report Van-Far is paying off past bonds and is under bonding capacity

Posted on Wednesday, February 11, 2015 at 8:32 am

When the Van-Far R-I School Board passed a resolution to create ballot language for a $2.161 million no-tax bond issue in the January board meeting, some area residents likely wondered where the district would be in general obligation debt if approved by voters in the April election.
After all, district voters passed no-tax bond increases in 2006, 2009, and 2012.
A breakdown provided by district auditors L.J. Hart & Company shows the district is ahead of schedule for paying down its previously passed long-term bonds.
Sometime next year, the district will have paid off its 20-year, 2006 general obligation bond after just nine years.
Auditors noted that there is $100,000 in remaining principal  for the 2006 bond, which will mature in March 2016, after $75,000 matures on March 1, 2015.
The Series 2009 bonds refinanced a portion of the Series 2006 bonds, saving taxpayers $371,349 of interest expense to shorten the final repayment period by six years. So the remaining principal for the 2009 bond shows $420,000.
The 2012 general obligation bonds show $1.4 million maturing from March 1, 2020-March 1, 2027.
Auditors noted that $295,000 of prepayments have been made on the 2009 bonds, which saved taxpayers $58,625 of interest expense to shorten a repayment plan by two years from the original 15. This is eight years shorter for repayment than what it took for the 2006 bonds.
In combining the two large chunks of interest savings, the total interest savings to the taxpayers in the district is $429,974 since 2009.
So what does all of this mean? Basically, the district has a $42,150,011 assessed valuation and a railroad/utility valuation of $1,955.267.
This means the district has a total bonding capacity of $4,982,796.
Even in adding the $1,920,000 left in remaining principal for the previously passed bonds, the new $2.161 million bond issue, if passed, keeps the district still $2,821,796 under the bonding capacity.
This amount is significantly below the 15% limitation. A proposed $2.161 million bond issue is for 20 years through March 1, 2035. It extends the current debt service fund levy for eight years but doesn’t increase it.
“If approved by the voters at the April 7, 2015 election, the $2.161 million Series 2015 general obligation bonds would maintain a short call feature of five years or less, allowing flexibility for additional interest savings from future prepayments or refinancing if economically feasible,” said L.J. Hart & Company in a prepared statement.
Before the April election, public discussion dates have been set for patrons to ask questions to Van-Far Superintendent Dr. Stephen Hunter and potentially representation from L.J. Hart & Company.
The 6 p.m. sessions are scheduled for the Farber Library on Tuesday, March 17; the Lange Building on Monday, March 23; and the Van-Far Elementary Library on Monday, March 30.
Superintendent Dr. Hunter said this latest bond issue came after a community survey was soon followed by a lot of hard work from the Van-Far R-I School Board.
“It took a lot of work and effort by the board and their diligence and input really shows,” he said. “They show a commitment to our students.”
He also said this is a great time for such a measure since the interest rates are very low.
He also said the measure could make a difference in a lot of classrooms and is pretty efficient.
More on the measure
The official ballot language will read “Shall the Board of Education of the Van-Far R-I School District, Missouri, borrow money in the amount of Two Million One Hundred Sixty-One Thousand Dollars ($2,161,000), resulting in no estimated increase to the debt service property tax levy, for the purpose of providing funds to complete facility improvements including addition of an Early Childhood facility, upgrades and elimination of current pod classrooms, parking lot repairs and replacement, classroom and exterior door upgrades, and other remodeling and repair improvements to the existing facilities of the District; and issue bonds for the payment thereof?  If this proposition is approved, the adjusted debt service levy of the School District is estimated to remain unchanged at $0.6099 per one hundred dollars of assessed valuation of real and personal property.”
In the January board meeting, Superintendent Dr. Hunter said the process of reviewing possible facility upgrades began with a survey taken last Fall.
The board passed a resolution for a bond issue in the amount of $2.161 million, which was the price tag on the Study 2 with alternates.
The measure would allow the district to do the following:
High School – Replace 23 classroom doors at $1,200 per door, new asphalt on main south parking lot, new concrete parking that is in the proximity of the school marquis (as it just expands the lot a bit), and a new gravel parking strip behind the school near where the Junior High football team practices.
Elementary School – A new 3,200 square foot addition to be built on the front part of the building for early childhood education to get the kids out of the trailers and into one building. It also will involve remodeling the South Pods and remodeling of boys and girls public restrooms. The existing exterior storefront in the area of the North Pods will be replaced. Kindergarten classrooms will also be divided with new partitions and doors into classrooms.
Existing Parking Lots-Complete replacement of approximately 23,2000 square foot of asphalt. Some asphalt will be replaced with new concrete to handle busses. A new 6’ wide addition to the drive lane with new concrete along with added gravel nose-in parking on the south side of the elementary school.
The total with alternates is $1.975 million plus 6-7% design fees and 4-5% contingency.
“There’s not a single thing on here that won’t benefit the kids of the district,” said Board President Christy Nelson in the January meeting.
Board member Larry Wheeler cast the lone “No” vote in the January meeting. He said he was concerned the process was being rushed too quickly and was concerned about debt the district was incurring.