School district comfortable taking on additional debt

The refinancing of bonds over the past five years is not only saving Glenwood Community School District taxpayers nearly $1.2 million in interest payments, but it will also allow for a faster payoff of the district’s remaining debt for the construction of Glenwood Community High School, which opened in 2009.

That’s one of the reasons Glenwood Community Schools Superintendent Devin Embray and members of the board of education are comfortable asking citizens to allow the district to take on more debt to fund the estimated $6 million overhaul of the high school athletic complex.

School district residents are being asked to approve a $1.34 (per $1,000 assessed value) Physical Plant and Equipment Levy (PPEL) in a special election on April 4 for the athletic complex project.
If passed, the 10-year levy would leave the district with outstanding debt of around $22,500,000 -  almost $10 million below the district’s authorized debt ceiling mark of  $32,450,636.

Twice in the last five years, the district has refinanced its debt from 2006, 2007 and 2009 general obligation bonds that funded the $24 million high school construction project.

“All three of those were refinanced in 2012 and 2015,” Embray said. “The reason we refinanced those is because the interest rates were dropping so much. Between the two, we saved between $1 million and $1.2 million in interest. We didn’t extend them any longer. It just refinanced the current debt.”

The district has two bonds left to be paid off on the high school project – $9.6 scheduled to be retired in 2026 and $8.5 million that will go off the books in 2027, the same year the PPEL would end if approved by voters next month.

Together, the refinanced bonds generate a property tax rate of $2.84.

“In 2027, our property tax rate will drop by $4.18 if the PPEL is passed,” Embray said. “If it’s not successful, it will drop by $2.84.”

The renovation of the high school athletic complex was first considered when the school district moved forward with the construction of an auxiliary gymnasium at the high school, utilizing state SAVE (Secure and Advanced Vision For Education) sales tax revenue. Embray said there was only enough money to fund one of the projects – forcing the district to find alternative funding for the athletic complex.

Initially, the district said it would seek private funding for the project. However, an assessment conducted last year determined there wouldn’t be enough private funding available to carry out the project. So, in January, members of the Youth For Action Committee (YAC) asked the board of education to put the matter up to a vote of the people.

“The biggest factor in the board’s decision to go PPEL instead of G.O. bond is the fact that the G.O. bond would go 20 years and it would carry $3.3 million in interest,” Embray said. “Doing a PPEL vote, it will only carry about $800,000 in interest and it will be paid off in 10 years.”

In an interview last week, Embray and school district business manager Kristi Buman noted that SAVE sales tax revenue being used to pay off the auxiliary gym debt is also used for a variety of other purposes in the district, including the district’s 1-to-1 initiative for technology in the classroom (Chromebooks for students), roof repairs, technology hardware, technology support, software licensing for non-classroom purposes, Internet bandwidth and general building maintenance and upkeep.

SAVE revenue - about $280,000 annually - also goes toward paying down district bond debt. Another $20,000 is rotated annually between athletics and fine arts for special purchases.

“The SAVE money has really saved our school districts. We’d be dirt poor if we didn’t have the SAVE money,” Embray said.

The school district receives about $1.6 million annually in SAVE revenue.