An e-mail sent from Joplin R-8 CFO Paul Barr to Superintendent C. J. Huff and R-8 Board of Education members reveals that in addition to the $8 million in long-term financing for "might-as-well" spending, the district is going to need $37 million in short-term financing.
The e-mail was provided to the Turner Report by a source close to C. J. Huff.
The long-term financing, which was approved by the R-8 Board of Education at its July 22 meeting, covered items such as a track at the high school, press boxes for the football and soccer fields, lighting and artificial turf for all fields, and four extra tennis courts, none of which were included in the bond issue plan that was presented to district voters and passed by a 45-vote margin in April 2012. The $37 million for short-term financing needs was not brought up at the July board meeting.
Barr projects that much of the money needed to cover the $37 million will arrive when FEMA, SEMA, the 404 Safe Room Grants and the Economic Development Administration reimburse the district on building projects:
The financing package we are putting together looks like this at this time. The financing team, including US Bank, will continue developing the package targeting initial Board action on T 7/22. Currently this is draft information:
Short term financing - offset by future collections from FEMA (75% of building projects), CDBG grant, 404 Safe Room grant, EDA grant $37 million. Cash flow projections reflect most of this to be paid off within 6-9 months. Maturity date 6/30/15.
Intermediate term financing - offset by future SEMA collections (10% of building projects) and lagging FEMA collections after all projects are closed out - received in the months following 7/1/15. Estimated $9 million. Collections during FY16 will pay this amount off. Maturity date 6/30/16.
Long term financing - for additional building scope items at JHS/FTC - scope items not a part of destroyed buildings. 20 year lease purchase bonds - $8million. Payable with approximately $600,000 of former capital outlay budget reduced for FY15 and future years for the short term. Future new revenues to be set aside in pieces to grow to $600,000 for re-payment years 6-20 so the capital outlay budget can be replaced in about 5 years.
Both the intermediate term financing $9m & the long term financing $8m are planned to bring to the BOE at the September meeting, with a closing in the first half of October.
Critical work continues this week with Greg Bricker, Financial Advisor, Jim Caldwell, Bond Counsel, and Randy Evans, President/US Bank and his financing team. I'll keep you posted. Thank you. - Paul Barr, CFO, Joplin Schools
Well, and this is NOT operating money, but rather construction.
ReplyDeleteSo....are they really going to borrow $45 million without going back to the voters? That's almost as much as the bond issue they barely passed last time. IF THEY DON'T PUT THIS TO THE VOTERS THEN HUFF AND THE R8 BOARD ARE NOT ONLY IRRESPONSIBLE BUT ACTING WITHOUT ANY REGARD TO THE PEOPLE OF JOPLIN.
ReplyDeleteAnd what happens if the FEMA grants and the rest of the "free money" doesn't show up? Then we are on the hook for a HUGE TAX INCREASE that will be needed to pay this back.
Contractors/construction companies aren't usually willing to wait a year or more to be paid, so it is understandable that some money would need to be borrowed ahead of payments from FEMA, SEMA, Economic Development, etc.
ReplyDeleteWhat is not understandable is spending in excess of anticipated reimbursements on "frills" that were not approved by taxpayers nor were they necessary for the re-opening of the schools. The argument that it costs less now than it will in the future is just a ridiculous attempt at justifying frivolous overspending.
Most of us footing the bill for this excess spending have to take out loans, which we will personally repay, for things we want but can't afford or wait until we can afford to pay for them, even if they cost more in the future. That's life.
It's difficult to explain to our children the value of delayed gratification when school administrators are teaching them to go into debt for "wants" instead of "needs."
It would be a dangerous assumption to believe that construction is why this $37 million dollar loan is needed. As I recall, the FEMA funds were what they were claiming would be used to restore the reserves. Have you all forgotten that? So, now how will they build that back? And it is very, very dangerous to assume that FEMA/SEMA will pay as much as they project. They pay what they feel are legitimate expenses. They may not care about the frivolous, and I doubt they will pick up the tab for repainting a gym painted in tan and Webb City blue. (And please, school board, quit telling us we have the wrong colors because the "design team" thought a whole gym full of JHS colors would be overwhelming. We want our gym to reflect our colors and school pride. We also would have liked that in the rest of the building instead of ugly red and green, but who are we to say? It looks like the grade schools. Yuck.)
ReplyDeleteWe are in this bind not because of unexpected construction expenses, but because money has been misspent or misappropriated in the millions. They have borrowed first $8 mil, now $37, and then there's the tax levy with a projected $3.2 million dollar deficit that will be taken from the classroom. And once again, I sincerely doubt this is the last of the borrowing. One way or another, the taxpayer will pay for this--there will be fewer things for our students to use for learning. There will be fewer teachers (seen any reading teachers lately?), the teachers will continue to leave in frustration, and our children will continue to slip behind. The taxpayers and patrons pay deeply when those in charge abuse their power, and when their governing body fails to check misused power. There is no free lunch anywhere. Everybody pays the price.
I wonder if this is all being proposed at this exact time in the hopes that people will be feeling too sentimental about the new school, or just too busy getting kids back in school, to pay attention to what the long-term impact will be on taxpayers. The entire situation is alarming, at the least. You can bet the tax levy is the only part that will be open to public discussion, and coming on Open House night, they are betting that no one will show up to discuss it. I hope the taxpayers of Joplin show their backbone and prove them wrong.