A-R district paying off bonds early
ARMSTRONG – As the Armstrong-Ringsted School Board makes preparations to consolidate with Sentral, Superintendent Matt Berninghaus presented a plan Monday to pay off the district’s bonds four years early.
“Part of the reorganization agreement is that the two districts will keep their debts separate,” Berninghaus noted.
Armstrong-Ringsted’s bonds paid for an addition in 2004 and are scheduled to be retired in 2020. The earliest the district can pay off the debt is 2016.
Berninghaus proposed increasing the district’s debt service levy from 69 cents to $2.50, which would help generate $330,000. The district would then buy down the tax rate by $1.10, or $200,000. This will actually drop the land tax rate from 12.92 percent to 11.46 percent. Without the buy-down, there would still be a tax rate decrease of 36 cents.
“This is a two-year plan, and each year, we will have that $330,000 in escrow to put toward the bonds,” Berninghaus said. “This will save the taxpayers $95,000 in interest.”
The board had discussed using other funds to pay off the bonds, but Berninghaus warned of expenses to come once A-R consolidates with Sentral.
“We’ll have two buildings, two bus fleets, two times the summer projects,” Berninghaus listed. “We should save that for the reorganization.”
The board unanimously approved the plan for the early bond payoff, but will need to approve the plan again for the 2014-2015 school year.
In other business Monday, more discussion was held about the reorganization plans with Sentral. A public hearing is scheduled for 7 p.m. April 10 at the North Union High School gym in Armstrong, with the voting date scheduled for June 25.
Berninghaus pointed out that if the reorganization goes through, the newly formed district will need to renegotiate a whole-grade sharing plan with North Kossuth.
“We will need time for that as well as the reorganization, which is why we went for the early voting date,” Berninghaus said. “With a new whole-grade sharing plan, we will need to file our intent with the state in November, and have a plan submitted by Feb. 1, 2014.”