BENTONVILLE — Members of the Bentonville School Board concluded that they want to decide about a new millage campaign before determining whether to refinance the district's existing debt.
The matter was discussed at length Monday morning during a special board meeting calledspecifically for the issue. Buster Beardsley and Scott Beardsley with Beardsley Public Finance spoke to the board members about a proposed refinance of the district's current debt, which would bring in a projected $2.8 million.
The proposal was brought to the board, Superintendent Gary Compton said, because its members had expressed repeated concerns about the district's fund balance, which is much like the district's savings account. Most school districts attempt to have a fund balance of 5 percent to 15 percent of their operatingbudgets. With an operating budget of about $102 million and a fund balance of about $5.2 million, Bentonville barely has the minimum required amount.
Scott Beardsley said it is a good time to refinance because interest rates are the lowest they've been since 1967. He also said the district's three outstanding bond issues could be refinanced into one.
However, the school board also anticipates seeking another millage increase sometime in spring 2010. A bond refinance is a typical component of any millageincrease proposal because the refinance allows the district to decrease the number of mills by which it asks voters to increase the overall millage rate. If the board were to refinance now, then refinance again in a few months as a part of a millage-increase proposal, it would cost the district an estimated $1 million in refinance charges.
There was discussion of the idea of seeking a millage increase, then returning to the refinance idea if themillage increase proposal fails in 2010. If that happens, the board would be able to add money to its fund balance, but there would not be enough money for construction needs.
The $2.8 million (or the amount later determined with new interest rates) could technically be used as a down payment for construction, but that would then create a red flag against the district with the state because the district would have expended a large chunk of its fund balance. The same scenario occurred several years ago when the district used its fund balance to purchase the land where Mary Mae Jones Elementary School, several athletics fields and Ruth Hale Barker Middle School now sit.
Board members will discuss the administration's new millage-increase proposal during their Oct. 22 work session. Compton said the proposal should be ready for release by Oct. 5 and will be a greatly scaled-back version of the failed proposal from March 2008.
The plan currently includes a new high school comparable to the Bentonville High School north building and a possible new use for the south BHS building, as well as a new middle school and a new elementary school.
News, Pages 1, 7 on 09/29/2009