Northeast Vernon County looks to finance HVAC project

By Johannes Brann

Coming near the end of the first quarter of the school year, the Northeast Vernon County (NEVC) R-1 School board filled its Oct. 24 meeting with purchase of a new van, a hot food warmer and serving counter and approval of the bus routes.

Board members on hand included, David Bruce, Heather Brown, Heath Brown, Deland Prough, Connie Gerster and Mike Newman. Also present were Kendall Ogburn, elementary principal; Josh Smith and Melissa McInroy, co-high school principals and Superintendent Chris Halcomb. Absent was board member Scott Pritchett.

“Within the next 60 days,” said Halcomb to the board, “our HVAC (heating, ventilation, air-conditioning) install at the elementary and high schools will be complete and the firm overseeing this project – EXP (Energy Solution Professionals, Overland Park, KS) – will want to be paid.” The superintendent added, “the balance due on the project is $433,000 and some change.”

Because the district is already servicing a 15-year debt to pay for its new metal pitched roof and has limited income due to its size and the tax valuation of much of the district, Halcomb said the district is less attractive for a conventional loan from a local bank.

At this point, Halcomb introduced Todd McCracken with L.J. Hart, a St. Louis based financial services company, whose specialty includes financing for governments and schools. This is the same firm which helped Vernon County refinance the bonds on its jail to a substantially lower rate, saving that county’s tax-payers over half a million dollars.

McCracken told the board its best option was to package and sell the loan. He proposed a seven-year note at a projected interest rate between 4.25 and 4.5 percent with annual payments being in the range of $75-$80,000 per year.

While this was welcome news to the board, McCracken then delivered some less welcome news. “In order to obtain such financing at this relatively attractive rate, you are going to need to improve the finances of the district,” stated McCracken with a more serious tone.

Back in August, when the district set its property tax rate, the superintendent proposed and the board agreed that with inflation on the rise, it would be best not to increase its tax rate to the maximum allowable with out a special vote.

Due to the previous year’s significant jump in real estate valuation, the property tax levy had to be reduced to #3.8052 per one-hundred dollars of assessed valuation which brought in $805,629, a decrease of 2.03 percent from the previous rear. In August of this year, the board chose to set the property tax levy at $4 per one-hundred dollars of assessed valuation; the maximum was $4.1528.

The adopted rate is projected to provide the R-1 District with about $917,400 in revenue; that rate change was approved by the board on a vote of 7-0.

“In order to make this loan package as attractive as possible, we need to be able to state that you not only have room to increase your levy without an election but that you will do so this next year and so strengthen your financial balance sheet.

Following questions and discussion, the board heeded Mr. McCracken’s advice, choosing that any early pre-payment of the loan could not be made prior to five years and directed him to proceed. A special meeting of the board took place at 6 p.m. on Nov. 2, in order to take formal action on the terms of the financing package.

The board accepted a bid of $64,416.64 for the purchase of a new 10-passenger van. This amount comes from federal funds directed to schools for certain uses as part of a Covid-19 financial relief grant to schools.

Commented Halcomb, “Instead of the district buying another mini-van, the larger size of this vehicle will allow, for example, the transport of two FFA (Future Farmers of America) contest teams or possible a basketball team.”

On a 6-0 vote, the board gave it approval.