Cary Dist. 26 signs bonds
Parents, students and other stakeholders in Cary Elementary School District 26 can breathe a sigh of relief now that the district has secured $15 million in working cash bonds to eliminate its cash flow problems for the immediate future.
School board members at a special meeting Thursday approved the issuance of about $17.6 million in bonds, including $15 million that will be abated to the district’s education fund. That fund currently has a $10 million shortfall. The remaining $2.6 million will be used toward the future abatement of taxes.
The district will see the first payments at the end of the month.
Finance Director T. Ferrier said the total debt service of the 14-year bond will amount to about $29.8 million, which accounts for the issuance of the bonds as well as interest. Ferrier added that about $13.7 million of the bonds are tax-exempt.
District leaders estimated the owner of a $300,000 would see an increase of about $85 over the next five years.
“The bonds are the next significant step toward the recovery of the district,” the district’s finance Chairman Scott Coffey said.
Board member Jason Larry called the approval of the issuance a vote of confidence from the district voters
“This is vital for our sustained financial health,” Larry said. “This is what the voters wanted. It is exciting in the life of the district.”
Board members voted 6-1 approving the bonds, with board member Chris Jenner abstaining. Jenner said while he supported the bond sale, the short time frame for reviewing some of the documents provided to the board caused some concern.
The $15 million bond issuance was needed to prevent the district from issuing a second year of tax anticipation warrants to solve its cash flow problems. A second year of tax anticipation warrants would have guaranteed a state take over of the district, leaving all decisions up to the state.
With the new source of income, the district reduced its proposed budget cuts from $6 million over the next four years to $4 million before 2015.