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Fillmore Central approves bond sale for retiree benefits


Fri, Nov 28th, 2008
Posted in Education

HARMONY - The Fillmore Central School Board approved the sale of general obligation (Other Post Employment Benefits) bonds totalling $1,180,000 at their November 25 meeting. The bonds will be used to pay retiree benefits over the next 20 years, freeing up money in the General Fund for educational purposes.

Jim Schmitt from Springsted, Inc., who handled the bond sale, said the bond carries an average interest rate of 6.7674-percent over the 20-year life of the bonds. He said that this was a very competitive sale compared to other districts his company has sold bonds for.

The bond money, minus underwriters fees of $15,340, will be administered by the Public Employees Retirement Association in a trust and can be drawn down by the district as is necessary. Schmitt said that the funds in the trust could be expected to draw an interest rate in the 4.5-percent range annually, but cautioned about managing risk in these volatile financial times.

Board member Ron Stevens asked if the bonds could be refinanced during the 20-year life of the bond, and Schmitt assured him that they could.

The 2008 Minnesota legislature passed legislation allowing school districts to pay off OPEB bonds through a local tax levy.

It is estimated that the tax impact on a $100,000 home would be $24 per year and the impact on one acre of Ag land would be 50¢ per acre. Taxes payable in 2009 will be the first year effected by the bond sale.

Wind Resolution

The board passed a resolution calling on state legislators to support efforts to restore Wind Energy Production Tax funds to school districts.

Board member John Torgrimson reported that in lieu of property taxes, wind turbines are assessed a wind energy production tax at the rate of 12¢ per kilowatt hour of electricity produced. In 2005, a formula for distributing revenues to local taxing jurisdictions was set as follows:

• 80-percent to counties;

• 14-percent to cities and townships; and,

• 6-percent to school districts.

In 2007, legislation was changed taking away any benefit school district's could receive in WEPT funds, as an equal amount a district could receive in state aid would be deducted. Efforts to get this changed in 2008 failed.

Torgrimson reported that there are three wind companies developing wind fields in Fillmore County and believed that there was legislative support from area legislators to take up this cause in 2009.

Athletic Committee

Board member Craig Britton reported on the fall athletic season, noting that participation was strong for both football and volleyball. He said that the number of students who have shown interest in volleyball in the lower grades appeared low, so the number of teams may need to be adjusted in the future.

The number of students out for Cross Country, which is shared with Lanesboro, was very low. At the start of the season, 18 students were out for the sport, with 70-percent of them being from Fillmore Central. Only a boys team could be fielded at meets at the end of the year and there was only one girl out for the sport.

The Athletic Committee will meet in January with Lanesboro officials to discuss sports sharing. Lanesboro is the lead school for Cross Country, and there is some thought that Cross Country might be dissolved if there are not enough numbers to field a team. Another thought would be for Fillmore Central to host the team.

Summer Rec

Board member Sue Ostrem reported on meetings with city officials from Harmony and Preston regarding the Summer Recreation program, which is administered by the district. Fillmore Central is one of the few districts that is involved in summer recreation, which is administered through Community Education.

Currently, the city of Harmony pays 65-percent of costs, while the city of Preston pays 60-percent of costs. Expenses for each city-program are in the neighborhood of $12,000 with approximately $4,000 in revenue generated in each community.

Ostrem said that she has proposed an 80:20 cost share with each city for 2009, with hopes that the district's financial involvement would eventually be phased out. The matter needs to be approved by both city councils.

Audit

The auditor's report for the 2007-2008 fiscal year was accepted by the board. Steve Salveson of Smith, Schaefer and Associates said that declining student numbers required continued expenditure review to stay in line with declining revenues. General Fund expenditures exceeded revenues by $42,647. The unreserved General Fund balance as of June 30, 2008 is 5-percent of current expenditures.

The Community Service Fund showed a deficit of $16,185 for the auditing period.

Other Business

• Spring coaching assignments were approved:

Baseball - (head) Ryan Scheevel, (assistant) Aaron Mensink, (junior high) Jon Holger.

Softball - (head) Tris Tollefson.

Golf - (boys) Brad Holten, (girls) Bonnie Piehn, (junior high) Lane Powell.

• Truth in Taxation meeting will be December 1, at 6:00 p.m. at the Middle School Media Center.

• The board approved the appointment of Jackie Whitaker as One Act Play director and Speech Coach.

• The next school board meeting will be Monday, December 22 at the Middle School Media Center.

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