Bond project surplus may fund more construction
July 15, 2008
Good investing and good construction bids combined to create an anticipated $15 million to $16 million cash surplus from the 2006 bond initiative that may help fund even more school construction projects.
A financial advisor from George K. Baum & Associates of Kansas City delivered that good news to the Springfield school board Tuesday night, suggesting the district use the money to pay for additional air conditioning in schools and to help pay for the new $20 million Hickory Hills school.
Three factors contributed to the cash surplus:
1. The district invested the original $96.5 million for a longer period of time and at a more attractive yield than initially expected, generating about $10.5 million in projected investment earnings.
2. At the time of issuance, a portion of the bonds were sold at a higher interest rate to generate a net bond premium of $3.5 million. These funds were intended for contingency purposes but have not been needed at this point.
3. Effective project management controlled expenses, saving between $1 million and $2 million in construction costs to date.
In the next few weeks, administration and school board members will discuss how to use the funds to address the list of existing facility needs. Potential projects will be consistent with the original scope of work authorized by voters in 2006.
Also Tuesday night:
- The board heard its first report on a boundary review process that will encourage community input. The review is designed to help ensure effective and efficient use of our schools and respond to stakeholders’ desire to reduce class sizes. The review process will focus on balancing school building enrollments and building usages while improving feeder patterns. Recommendations will come to the school board in November or December. Changes will become effective in the 2009-2010 school year. Staff and community members will be encouraged to participate in this review by completing on-line surveys, attending town meetings and participating in focus groups. Town meetings are set for Aug. 12, Sept. 11 and Oct. 9.
- The board received a summary of the latest quarterly report on district goal indicators and measures. The report is available under “Quarterly Reports” on the left side of the home page at www.springfieldpublicschoolsmo.org
- The board approved a $78,869 change order to the Hillcrest High School construction project. An update on that construction project was included in a quarterly bond project update presented to the board.