(St. Leon, Ind.) – Refinancing a bond issue will save Sunman-Dearborn Community Schools millions more than had been expected.
During Thursday’s school board meeting, SDCSC Financial Operations Director Charles Blake told the board that the 2005 bond issue for East Central High School has been refinanced. A single buyer of the bond is expected to close on the sale March 21.
The school is taking advantage of lower interest rates to save money, but the savings may be greater than expected. When the idea of refinancing of the bond issue first came up in December, Superintendent Jeff Hendrix said the savings could be up to $2 million.
Blake said Thursday that because the new rate will be 1.97 percent, the savings will actually come out to $4.6 million over the next 12 years.
“$4.6 million is a large amount of money that’s going to go back to our taxpayers over the next 12 years. We’ve worked really hard in this district to get us financially sound,” Hendrix said.
Board president Jeffrey Lyness said he was pleased with the news.
“We’re all happy it turned out the way it did,” he said.
Blake added that the school district ended February with a $1 million surplus. A few accounts were in the red, he said, but should balance when payments are received from the state on Friday. The district’s 2013 fiscal year is forecasted to end in June with a $2 million surplus in the general fund.
At the same time its saving money, the district is watching for potential increased costs with impending implementation of the federal Affordable Care Act. Human Resources Director Mary Ann Baines informed the board that information is overwhelming and constantly changing.
“It’s an ever changing battle,” she said.
Baines gave some known facts regarding healthcare reform. The law, commonly called Obamacare, will be in effect January 1, 2014. It dictates that employers with over 50 full-time employees – working at least 30 hours a week – will be required to offer to at least 95 percent of full-time staff coverage that will cost no more than 9.5 percent of their gross salary.
Questions remain to be answered about how school districts will calculate whether employees are working an average of 30 hours a week, Baines said.
If the district elects not to offer the 9.5 percent plan, it could be forced to pay a penalties ranging from $2,000 per person annually. Even if the school corporation offers the plan, it will have to pay up to $3,000 per person who makes the choice not to use the district insurance plan, Baines said.
Baines noted that she has been attending meetings to get a better grasp on how to comply with the law.
“It’s going to be a process, and I want to make everybody aware,” said Baines.