Board Holds First Readings on Appropriations, Bond Refunding Opportunity

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(June 19, 2012) The Westerville City School District (WCSD) Board of Education yesterday held three first readings on financial-related resolutions during a special meeting at 6 p.m. in the Westerville South High School commons. Two of the resolutions pertain to budget appropriations while the third relates to a bond refunding proposal estimated to save the district nearly $1 million on debt repayments.

Fiscal Year 2012 Final Appropriations Resolution
WCSD Treasurer Bart Griffith presented to Board members a resolution to amend appropriations for the period July 1, 2011 to June 30, 2012. By law the Board must adopt an annual Appropriations Resolution by October 1 of each fiscal year, which authorizes the expenditure of funds for that particular fiscal year. Boards of education also may amend their Appropriations Resolution throughout the year. The proposed Final Appropriations Resolution for FY12 reflects a $7.75 million decrease to the appropriations measure last approved by the Board in April 2012. The decrease in appropriations from $199,856,631 in April 2012 to the proposed $192,107,091 is reflective of budget reductions authorized by the Board due to the failed November 2011 continuing operating levy and subsequent approval of an emergency operating levy in March 2012.

Fiscal Year 2013 Proposed Appropriations Resolution
Griffith also presented Board members with a proposed FY13 Appropriations Resolution in the amount of $187,664,602, which reflects an approximate $12.2 million decrease from the original Appropriations Resolution approved by the Board for FY12. Griffith said the reduction mainly is due to cost-cutting measures implemented throughout the 2011-12 school year, as well as decreased personnel expenses achieved primarily through employee retirements and a reduction in force.

Bond Refunding Opportunity
Given historic-low interest rates, a strong credit rating and an available window of opportunity, Board members are considering a resolution to refund (i.e., “refinance”) a portion of the district’s bond indebtedness to achieve nearly $1 million in savings on future debt repayments. The actual amount saved through this traditional refunding is subject to several factors, including how the final refunding is structured and interest rates on the day of pricing. The district has outstanding bonds from 2004 with interest rates greater than 4.5 percent. Projections from district bond consultants Robert W. Baird & Co. indicate that $27,355,000 of these outstanding bonds could be refunded with an interest rate of approximately 2.16 percent, resulting in a projected savings to taxpayers of $979,886. The district’s last refunding of outstanding bonds occurred in December 2006. At that time district officials refunded $48,875,000 in bonds and achieved slightly more that $3 million in savings for taxpayers.

Board of Education members are anticipated to hold a second reading of these three resolutions during their next regular meeting at 6 p.m. on June 25, 2012, in the Westerville South High School commons, 303 S. Otterbein Avenue.