There was good financial news at the Brainerd School Board meeting Monday night, but there was also a sense that things could be more difficult this spring.
The school board heard savings will be passed on to taxpayers in 2004 from a Monday bond sale. And state cuts in education funds hit a variety of activities, but none too heavily -- yet. Assistant Superintendent Gary Phillips said they are still working to see how state cuts will affect the school district.
"We won't have that exact information until later this week," Phillips said.
He said now it looks as if a few thousand dollars will be lost in several areas. About 30 programs will have cuts, including summer teacher training, afterschool enrichment grants, adult basic education and Community Education reserves.
Phillips said the cuts were much smaller than what could have happened, but the process is not completed. If the economy slumps and the state is faced with a larger deficit, Phillips said another round of cuts could come by late April or early May and education spending may be significantly affected.
"So far so good," Phillips said.
Good news came from a six-figure dollar savings because of low-interest rates and a flurry of bidders for the school district's $3,915,000 general obligation school building refunding bonds. Interest rates fell below estimates made a few months ago.
The school district received 11 bids for its bond sale Monday, which was handled by Ehlers & Associates, the district's independent financial adviser for the bonds. Cronin & Co., Minneapolis, was the low bidder with an interest cost of 2.76 percent. Because interest rates on the new bonds are considerably less than bonds issued in 1993, the result is a debt service cost reduction of about $442,000 in fiscal years 2004 to 2011 -- for an average of $55,295 per year.
Kristin Hanson, Ehlers & Associates, told the school board the market is hungry for bonds as people are looking for a safe investment haven given the current state of foreign affairs. She said the net present value of the savings is about $394,000.
"The savings will be passed on to taxpayers," Hanson said.
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