School Board moves $1.7 million in building funds to bond payments

By Rosemary K. Otzman
Independent Editor
The Van Buren Public Schools Board of Education voted unanimously at Monday’s regular meeting to move an estimated $1.7 million in money from 2009 bond proceeds left over from high school construction to the Debt Retirement Fund.
The money will be transferred to assist the district in making its debt service payments on its bonds, so it doesn’t have to raise the millage paid by taxpayers.
Finance Director Karen Moffitt recommended the transfer explaining that the school district’s 2009 School Building and Site Bonds, which were Unlimited Tax-General Obligation bonds, were issued in the principal amount not to exceed $79,040,000 for the purpose of replacing Belleville High School, equipping it with technology and furnishing it, including athletic fields.
The bonds were issued by the school district on May 28, 2009 and designated as “Build America Bonds” in which the school district would receive a federal subsidy of 35% of the interest to assist it in repaying the debt service on the bonds.
But the subsidy has since been reduced to 32.48% by the federal government, which amounts to $111,556.90 this year. Since the federal assistance is reduced, Moffitt said it is in the best interests of the district to use the remaining bond proceeds to pay a portion of the debt service remaining on the bonds.
The decision needed to be made by Feb. 7, Moffitt said.
School Supt. Michael Van Tassel said the board could choose to spend the $1.7 million, but, “We feel that we need to do right by the community.”
He said the federal government reneged on paying for interest on the bonds. He said the board has more than the right to spend the money, but since they have the facility completed and they can stop the rising millage rate by using these funds.
He said the board has until May to spend the money.
Trustee Scott Russell said, “A few years ago, we entered into a contract with the community … and we built a state-of-the-art facility … I approve of a refund back to the taxpayers.”
Treasurer Sherry Frazier agreed, saying by using the funds they can hold off on a tax increase for “a couple of years.”
Secretary Kevin English said the board is being good stewards of the community’s funds and their decisions during building the school have cut costs for the future.
Vice President Martha Toth said she has some disappointment in the federal government on the Build America Bonds, that is costing the district more than expected.
She said it was because of the sequester cuts that they are “reneging on this deal.”
The 2009 bonds will be paid through 2039, with the interest amount being reduced every two years.
In other business at Monday’s meeting, the board:
• Reelected the board officers for the year: President Brent Mikulski, Vice President Martha Toth, Secretary Kevin English, and Treasurer Sherry Frazier. The board also agreed to hold just one regular board meeting a month, except for June when there will be two meetings, and one workshop a month;
• Heard two songs by the Belleville High School Choir to honor the school board during School Board Recognition month. The board members also received carrying cases for their iPads, which carry the school district’s name on the side. Supt. Van Tassel praised the board members for doing their thankless jobs, making hard decisions, and caring for the students;
• Heard a presentation on McBride Middle School by administrators, led by Principal John Leroy, who pointed out the school has a 50% decrease in discipline problems from last year. He also noted the recent honor roll was 344 students long, which was half the school population. The presentation included a six-minute video of students thanking teachers for their work;
• Held the first reading of 20 Board Policy updates, which includes a new policy of not entering into or renewing contracts with any Iran-linked business while Iran is a state sponsor of terror as defined by state law. Another underscored the state law that does not allow the district to deduct union dues from employees’ paychecks;
• Approved hiring a non-union, Fringe Benefit Accountant at a wage of $40,000 plus benefits to deal with the huge amount of paperwork needed to comply with the Affordable Care Act. The district has 12 different insurance carriers to deal with. The federal government has significant penalties for not complying, including $2,000-$3,000 per employee. “We have to be in compliance,” Supt. Van Tassel said. This new hire also will do some secretarial work for the finance director who lost her secretary last year during cuts. It now has been determined the administration building employees are “spread too thin,” according to Shonta Langford-Green, Director of Human Resources;
• Approved the Best Practices Incentive Resolution which will qualify the district to receive $52 per pupil in a one-time grant of best practices funds from the state, about $267,460;
• Approved the hiring of Shannon Curne as a counselor at BHS as of Jan. 6;
• Approved the termination of Marcus Leon, a bookkeeper in the Administration Building for two years, for other employment in Holland, MI;
• Approved hiring of Carlton Fields as a paraprofessional as of Dec. 16;
• Approved a field trip of Special Ed Services to Imagination Station in Toledo, Ohio. The Van Buren school has been adopted by the Imagination Station and is given free admission; and
• Heard Supt. Van Tassel say that the Affordable Care Act has five significant taxes coming up that will cost the district from $200,000 to $400,000. “We have to figure out how to comply … We just got out of deficit,” he said. He said a problem with MESSA insurance is on the horizon, as well as contracts with Priority One and Blue Cross. Treasurer Frasier said all the ramifications coming down the line from the Affordable Care Act need to be looked at by those who put it into effect.
The next regular meeting of the Board of Education is 7 p.m., Feb. 10, at the Commons at BHS.