BOARD FINANCE COMMITTEE MINUTES

JUNE 12, 2006

 

Members of the Board Finance Committee met on Monday, June 12, 2006, at 7:40 p.m. in the Dining Room. Present were School Board Members Dr. Craig Haytmanek, Charlene Koch, Rosario Amato, Diane Rowe, Joseph Craig, Loretta Leeson, and Margaret Williams. Also present were Dr. Joseph A. Lewis, superintendent of schools; Stanley J. Majewski, Jr., assistant to the superintendent for finance and administration; Les Bear from Arthurs LeStrange; and members of the press.

 

COURTESY OF THE FLOOR – None requested.

 

Technical Amendment – Financing – Mr. Majewski and Mr. Bear presented information to the committee with regard to restructuring the district’s 2005 and both of the 2007 Bond Issues. A Resolution confirming the interest rate management plan relating to the Basis Swap Restructuring Amendment will be presented at the June 26, 2006, Regular Board Meeting for approval.

 

Discussion ensued regarding the advantages of adopting this amendment. Mr. Bear explained that the current Federal tightening cycle has caused a significant flattening of the yield curve. The district can take advantage of this by amending the Swap Agreements to include provisions based on the 10-year LIBOR rate. As the yield curve approaches a normal slope, the district would receive payments to reduce the annual interest expense. The amendment would be a Forward Start Agreement scheduled to begin on or about December 1, 2006. Assuming a 10-year average generated yield curve, the savings over the life of the financing would be $34 million. This assumes the yield curve to be at this level continuously for 25 years. There is no direct cost to the school district for this Technical Amendment. If the amendment does not prove advantageous to the district, we can unwind it because the original Swap Agreement remains unchanged.

 

The committee gave their approval to proceed with placing the Resolution for this amendment on the June 26, 2006, Regular Board Agenda.

 

HOLY CHILD SCHOOL LEASE – As a result of increases in the number of students at Fountain Hill Elementary School, there is a need to lease space to accommodate this growth. Mr. Majewski learned that both, Sts. Cyril and Methodius School and Holy Child School will be closing at the end of this school year. Mr. Majewski had several meetings with Reverend York regarding the leasing of Holy Child School to house district educational programs. This lease will be presented at the June 26, 2006, Regular Board Meeting for approval.

 

STS. CYRIL AND METHODIUS SCHOOL LEASE - The Regional Academic Standards Academy (RASA) would be moved to Sts. Cyril and Methodius School, if this lease is approved.

 

Director Amato questioned the need to move RASA because he believes the district could find space for the proposed Alternative Education Program without displacing RASA and leasing this site.

 

LINDEN STREET WAREHOUSE LEASE – Mr. Majewski advised the committee that as a result of an auction held to dispose of district surplus equipment, the district no longer needs to lease the warehouse on Linden Street. This lease will be terminated as of December 31, 2006. The termination of the lease results in a cost savings of $36,000 or more per year to the district.

 

SOLICITORS STANDARD AGREEMENT FOR FEES, COSTS, AND EXPENSES FOR REPRESENTATION OF PUBLIC – Mr. Majewski advised the committee that the last increase in the Solicitor’s Retainer Agreement was in 2002, and he will be presenting an updated Agreement for board approval at the June 26, 2006, Regular Board Meeting.

 

CARBONATED BEVERAGES IN VENDING MACHINES – Mr. Majewski requested from the committee that vending machines located in schools not be stocked with regular Coca-Cola and that these slots be replaced with other Coke products. The proposed Wellness Policy will require reducing non-nutritional products, such as regular Coke. The school district wishes to implement the changes July 1, 2006.

TRANSMITTER LEASE REQUEST – Mr. Majewski informed the committee that as a result of a special needs student’s graduation, the transmitter purchased by the district is no longer needed. The parents of the student would like to purchase this transmitter. Mr. Majewski is requesting an exemption from board policy to allow the parents to purchase the transmitter.

 

INSURANCE PROPOSALS – The district’s package policy, automotive policy, worker’s compensation policy, excess liability, and school board legal liability policy expire as of June 30, 2006. An agenda item for renewal of these policies will appear on the June 26, 2006, Regular Board Meeting agenda.

 

There is a significant increase in the premium for the package policy, but a targeted amount has been budgeted for in the 2006-2007 budget. The worker’s compensation insurance premium is based on actual payroll, and the PSBA Program is the lowest quoted carrier. The legal liability and the excess liability policy premiums remain the same as last year.

 

The meeting adjourned at 915 p.m.

 

 

Minutes prepared by:

Confidential Secretary to the Assistant to the Superintendent for Finance and Administration