Published Thursday, July 25, 2002
GREENVILLE
bond issue
also will help lower debt
Herald Staff Writer
Greenville Area School Board members voted Wednesday to take advantage of low interest rates and refinance a 1998 bond issue.
The move -- coupled with one to help pay down the bond debt with $90,000 in extra state aid -- is expected to save the district $386,395 over 16 years.
The board restructured its 1998 bond in an eight-minute Internet auction Tuesday. The cyber sale included 15 offers from five bidders on the $7.05 million bond issue.
Mellon Financial Markets LLC's winning bid features an average interest rate of 4.0154 percent over 16 years, with a low rate of 1.75 percent the first year and a high rate of 4.55 percent in the last.
Under the original agreement, the average rate was 4.7 percent.
Also on Wednesday, school directors reopened the 2002-03 budget to allocate additional state subsidy approved by lawmakers after the local board adopted its budget in June. Lawmakers passed a state budget late last month that provided an additional $196 million in aid for Pennsylvania's 501 school districts.
The aid comes with a caveat. Lawmakers stipulated that school boards which adopted budgets based on assumptions they would get only a 1 percent subsidy hike were required to reopen their 2002-03 budgets to reflect the adjustment. The districts were to apply the new funds to cut property taxes or make rebates, reduce debt or restore cuts in education programs.
Greenville received an additional $102,700 -- $90,000 of which will be used to pay down the bond debt. Of the remaining money, $4,700 will be spent on elementary environmental education programs and $8,000 will be used for instructional materials and equipment. Both areas were hit with cuts in the board's original budget.