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Board OKs shift in operating levy
The New Prague Area School Board approved a shift in the district’s operating levy for 2014.
In 2011, voters approved an operating levy of $857 per pupil unit through 2017. The legislature has changed the school funding formula in several ways that will affect how the district classifies the levy.
First, a change in the formula has reduced the levy to $844 per pupil. The second change is that school districts in the Metro Area, including Scott County, will have $424 of that levy converted to a "Location Equity Index," which they are allowed to levy without voter approval.
The third change allows district to convert up to $300 of any voter-approved levy into a board-approved levy for up to five years. Board members approved a resolution at its Monday, July 22, meeting, to do so, with the $300 levy expiring in 2018. When that levy comes due, the board can renew it without going to the voters.
That leaves a voter-approved levy of $120 in place until 2017.
District Finance Director Sandy Linn explained that the changes would have no impact on taxpayers or on school revenues this year, that the only changes are in how the levy is formulated.
Board member Dennis Havlicek noted that the legislature gave a break to local districts by reducing the need to go to voters to approve smaller levies. "It takes away the cost of running the elections and the need to go to the voters as often."
Bond refunding The board also heard a report from Linn regarding issuance of refunding bonds for bonds issued in 2005. Several weeks ago the district’s financial advisor, Springsted Inc., told the district the market had reached a point where it was feasible to refinance these bonds by issuing a new set of bonds at a lower interest rate. Before Linn had the chance to bring the matter to the board, a change in market conditions brought interest rates up and it was no longer feasible to do so.
Linn noted that the market is volatile right now, and Springsted said it is likely the rates could go down again. They recommended that the board pass a resolution giving the administration the ability to begin work on the refunding bonds in the event that the rates go down again. That authority will expire in late September.
Linn explained that the authority would allow the district to move more quickly to take advantage of lower rates, and that the board would still need to approve a sale. Board members approved the resolution unanimously.