by Jennifer Tangeman
Considering capital improvement projects can be a difficult feat when your budgets are shrinking, but it’s not impossible, a school board consultant says.
Todd Samuelson, managing partner for Umbaugh and Associates, talked with the Logansport school board this week about the impact of legislative changes to the corporation’s capital projects fund and possible bond solutions.
On top of a $1.1 million cut in state funding, the school corporation also predicts it will see a drop in revenues from property taxes.
The capital projects fund revenue will be roughly $500,000 less than 2008 levels, Samuelson said. Transportation could lose $270,000 and bus replacement funds are predicted to see a $38,000 drop.
“We need to consider the reduction to be permanent, and keep in mind that more cuts may be possible,” he said. “Unfortunately, capital improvement needs do not go away.”
The Logansport school corporation has identified capital improvement needs such as boilers, heating, ventilation and air-conditioning systems, lighting and temperature controls. Those improvements could eventually save the corporation around $400,000 a year in operating costs.
“It is going to be hard to pay the utilities and insurance, let alone think about capital improvements,” Samuelson said. “All that being said, how can a corporation consider any sort of capital improvements?”
Samuelson outlined using short-term and medium-term debt to generate $4.8 million to $6.1 million. The school corporation’s existing bonds will drop by about $1.3 million from 2010 to 2011, and Samuelson suggested filling the gap with a new bond. By keeping the debt level equal to 2010, the levy would remain the same.
The board took no action regarding the debt options.
“We’re trying to provide information so you can make decisions, however difficult those may be,” Samuelson said.
School board member Mike Fiscel thanked Samuelson for his presentation.
“It takes someone like you to come with the nuts and bolts and the reality of our financial situation,” Fiscel said. “It is a monster of a problem. There is no doubt about that, and the impact of that will be surely felt unilaterally in this corporation.”
• Jennifer Tangeman is a reporter for the Pharos-Tribune. She can be reached at 574-732-5148 or jennifer.tangeman@pharostribune.com.
