Schools secure funding

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Otsego, Eastwood and North Baltimore school districts have qualified for no-interest bonds to fund their
new schools.
The Ohio School Facilities Commission met Friday to review applications for funding, with grants provided
through federal stimulus funds.
Otsego had asked for $4 million for its new elementary project, and received the full amount.
Eastwood had requested $10.425 million for its planned K-5 building, and learned it will receive a
minimum allocation of $2,474,781.
North Baltimore is set to receive $5 million for its new middle school/high school.
Even with the funding, Otsego will still use a lease-purchase agreement that has antagonized some voters
by taking away their opportunity to cast a vote on the proposed project.
"When we applied for these bonds, the only thing it’s really doing is making it zero percent
interest," explained Treasurer Pam Harrington. "It will still be a form of the lease-purchase,
because we are not going to the voters."
Harrington said the next step is selling the bonds with the help of the district’s financial adviser.
Otsego officials had announced in recent meetings that construction of a new preK-5 building on the
Tontogany campus, closure of its elementaries in Grand Rapids, Weston and Tontogany, and streamlining of
personnel and services would save enough money to make the necessary payments on the lease.
The OSFC approval for Otsego is valid for a bond sale before Dec. 1. If bonds are not issued by that
date, the funds may be reallocated to another applicant.
At Eastwood, Superintendent Brent Welker said this morning the amount received "is about in line
with what we were expecting."
However, there is a string attached that Welker said he hadn’t expected: The district has one shot, in
November, of passing its local share. If it fails to do so, the $2.47 million will be returned to the
state and reallocated to another district.
The best-case scenario, with passage of a November bond issue, is that Eastwood could receive up to $5.8
million in the no-interest bonds, he added.
The Eastwood Board of Education is planning to meet Friday at 7 a.m. to discuss the November ballot
issue, as well as the renewal of a permanent improvement tax issue.
Welker said the proposed 38-year bond issue isn’t expected to collect more than 2.7 mills annually from
taxpayers.
"Our hope would be that we could lower that cost for them," said Welker. "If we can sell
these bonds at what we believe we can sell them for, we can collect lower millage."
Welker had explained earlier this summer that by mixing two bond types – the zero-percent construction
bonds and traditional – the cost to taxpayers for the proposed K-5 building would drop.
The district pulled a 3.2-mill bond issue off the May ballot because of the declining economy. That issue
would have collected $10.4 million to help pay for the new elementary on the main campus; buildings in
Luckey, Pemberville and Scotch Ridge would close.
However, November is the last chance for the district to get OSFC funding, as well as the construction
bonds, to help pay for its new school.
"November is it for us. Our time line actually ran out Aug. 1, but the legislature extended us
through the end of 2009," Welker stated this morning.
North Baltimore school officials could not be reached this morning for comment.
Qualified School Construction Bonds (QSCB) are authorized by the federal government through the American
Recovery and Reinvestment Act (ARRA) of 2009. The bonds provide federal tax credits for bond holders in
lieu of interest in order to significantly reduce an issuer’s cost of borrowing for public school
construction projects.
Ohio has $267 million available through the ARRA for school construction projects, and the OSFC was
charged with doling out funds based on applications.

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