The December 9, 2002 committee of whole meeting of the Board of School
Directors of the Spring-Ford Area School District was called to order in the
cafeteria of the Spring-Ford High School with the following in attendance:
Region I: Michael V. Masciandaro and Bernard F. Pettit
Region II: Janet A. Stokes and Robert A. Weber
Region III: John S. Grispon and Richard J. Schroeder
Administrators: Dr. Genevieve D. Coale, Superintendent of
Schools, Dr. Marsha R. Hurda, Assistant
Superintendent of Schools, Timothy C.
Anspach, Business Manager, and Bruce
Cooper, Director of Planning, Operations, and
Facilities
Clerk: Pat Dillon
IV. APPROVAL OF THE MINUTES
Mr. Schroeder asked why minutes were on the committee of the whole
agenda. Dr. Coale said it was on the original template but would be moved
to the work session for approval at the board meeting if all board members
agreed.
PUBLIC COMMENT ON AGENDA ITEMS
Kathleen Bryant, The Independent and Upper Providence
Asked the status of reimbursement with the two Bechtel projects. Mr. Pettit
said it was not on the agenda. He said an appeal was to be filed
tomorrow. It is a technical faux pas and he expressed confidence that it
would be overturned. Mrs. Bryant asked if the five board members who
voted for EI Associates had second thoughts. No replied Mr. Pettit, Mr.
Masciandaro, and Mrs. Stokes.
X. FINANCE
C. Capital Project(s) - Financing
Dr. Coale said that the board asked for data and that Mr. Anspach would
present it. Mr. Anspach said the plan consists of current status and
includes PlanCon for the Oaks and Limerick renovations, the high school
addition and project. This plan will be on the board agenda in January.
PlanCon F has been finalized and was approved by the architect, it is now
with the district auditors. The Oaks and Limerick review is finished. Mr.
Anspach said that he expected to have all four projects in the PlanCon J
approval. The district is able to charge off more to the bond issue because
it did well in interest. A total of $33,473,712 could be charged. The
General Obligation Bond of $10 million or the 2002 bond for $15 million
have been touched. The addition to the Upper Providence Elementary
School now is reflected in the numbers. The Intermediate School has a
PlanCon G of $48,000,204 and the Winnies is $19 million. Mr. Weber
asked why the estimate for Winnies jumped from $16 million to $19
million. PlanCon A had $16 million, but Draft 16 showed $19 million for
unforeseen costs such as the township road, said Dr. Coale. Under the
Winnies Site, the $11,552,216 is the area that has not been financed by a
bond yet, said Dr. Coale. Mr. Weber asked how the road widening costs
are charged to both projects. Mr. Cooper said they are cut in half. Mr.
Anspach said the $29.6 million in the budget book changed once another
$15 million was borrowed and $29.8 million was charged off with
additional interest. That bond is done with $20,000 left in the account. Mrs.
Stokes asked about the money left in the first bond. The additional
$20,000 will be spent on the Upper Providence site to liquidate the bond.
Mr. Masciandaro asked if Draft 15, with a $19 million estimate for Winnies
was in the budget book. Yes, said Mr. Anspach. Does the cost of $12.5
million for Upper Providence include the cut of Lewis Road? asked Mr.
Masciandaro. We're $11.5 million short in funding for construction projects
said Mr. Masciandaro. Correct said Mr. Anspach. Mr. Masciandaro asked
when the money was needed. The end of 2004 said Mr. Anspach. Dr.
Coale recommended preparing in spring of 2004. Mr. Masciandaro said
the board should start working with the bond counsel. This plan only
includes Winnies said Mr. Anspach. This doesn't include middle school
renovations since that is included in the Capital Reserve account said Mrs.
Stokes. Yes, said Mr. Anspach.
Capital Reserve Plan - The board proceeded to discuss the Capital
Reserve Plan. Mrs. Anspach reviewed the plan. Mrs. Stokes asked
whether estimates had been received for the middle school. Mr.
Masciandaro said that the board said it was willing to spend $10.5 million.
Mr. Schroeder asked if the PECO payments change, would the district
have money for property purchases. The district would be $2.3 million
short said Mr. Anspach. The district is going to pay $3 million on property
and it's not in the schedule, said Mr. Schroeder. We want to open the
middle school in August 2004-05 said Dr. Coale so the $4.5 million is in
the correct year and the $700,000 is in the correct year. She praised Mr.
Schroeder's point of having a backdoor plan contingency. The capital
reserve may not cover everything since it is based on expected revenue,
she added.
In two years, there will be another bond issue to cover other building
needs, said Mr. Anspach. The discussion switched to the 15 separate air
conditioners at Brooke versus a centralized chiller. What kind of capital
reserve should we have for future projects, Mr. Schroeder asked. What
can we borrow in the next fiscal year, asked Mrs. Stokes. Future
borrowing capacity is $15 million as a gross figure and $18 million
includes the subsidized portion, said Mr. Anspach.
-Mr. Grispon arrived at 7:56 p.m.-
If we borrow $18 million, we're talking $1.5 million in debt service, can we
do that, asked Mrs. Stokes without having a huge tax spike. Mr. Anspach
pointed out the debt schedule included in the packet. Next year, we'll need
$1.5 million to break even. Dr. Coale said in the past, Mr. Weber had
recommended setting aside money for capital reserve. Now we're more
dependent on PECO money. Mr. Anspach said that Mr. Weber advocated
taking tax money from a large company into capital reserve, approximately
$1 million a year. Mr. Anspach asked about the cost of the fields. Students
are being bused to different locations and the district needs more fields,
he added. Mr. Grispon said there is no relationship between money you
put away and the cost of the project. Capacity at the high school has been
reduced because of special education needs, said Dr. Coale. In the years,
2004-5 and 2006-07, the district will be hit hard with enrollment increases,
she added. What is in capital reserve today asked Mr. Schroeder. Mr.
Anspach said $13,145,000. Mr. Schroeder said you need $11.5 million for
Winnies by August 2005; you need $10.5 million for the middle school by
August 2005; you need $4 million for land before August 2005; you need
Brooke's roof for $1 million before 2005; administration $2 million by 2005
(that number is too low, said Mr. Anspach); $700,000 for fields by 2005.
That is $18.7 million said Mr. Anspach. Mr. Schroeder said that is the
minimal amount to borrow. You didn't include the PECO money said Mrs.
Stokes who said to decrease the figure by $4 million to reduce it to $14.7
million. Mr. Masciandaro said $3 million for the district office was
questionable since commercial space is available. Dr. Coale
recommended not addressing a district office when a roof was needed at
Brooke. So $14.5 million is bare bones, said Mr. Schroeder. Mr.
Masciandaro said $15 to $20 million, in the mid 2005 range, and consider
borrowing capacity and debt service. We need to borrow $11.5 million
more for Winnies site. Do you want to continue paying for the middle
school in cash or in the bond to give you some reserve in capital reserve,
Dr. Coale asked. You might consider also an additional land purchase. Mr.
Weber asked why pay interest when you could take it from capital reserve
asked Mr. Weber. We should finish the fields at the high school to reduce
transportation and athletic trainer costs, Dr. Coale added. She said the
board should discern its priorities and how to finance them. The board
discussed the advantages of borrowing and using cash over the 20-year
term. Mr. Masciandaro said to finish Winnies at $11.5 million that it would
be beneficial to borrow at least $15 million. He listed parameters of $15
to $20 million; borrowing between now and 2005 with six-month
increments; include ability to borrow based on debt load; and what it
means in terms of debt service. Mr. Schroeder asked for four models.
One model should show an early possibility for funding with lowest
rates and have it ready July 1st. Another model should be December
with interest rates increased by .5% or 1%. A fourth model should be
early 2004. Elementary and other capital projects would be the
reason for borrowing, the board concluded. The board requested
that Mr. Murray make his presentation at the January meeting of the
whole.
Mr. Weber asked whether there was a positive or negative arbitrage.
About 2.5% negative said Mr. Anspach, an amount of approximately $50
million. It would only be 2.5% of what we haven't drawn down on said Mr.
Schroeder. The board discussed longevity of bonds and interest rates.
The 1999 bond is close to being expended said Mr. Anspach. To float a
bond costs $800,000 for each $10 million borrowed said Mr. Anspach. Mr.
Weber asked about cost of bond counsel and printing. At least $200,000
said Mr. Anspach. Mr. Anspach cautioned the board that Mr. Murray's
presentation would strictly be a forecast. In year 03-04, the district would
need $600,000. In 04-05, the maximum payment would be close to $1.2
million, said Mr. Anspach. Mr. Grispon said everything might be thrown out
since July 1st might be different.
Mr. Schroeder asked about replacing the Brooke air conditioning. The
board discussed other large ticket items such as parking lots, sidewalks,
and trees. Mr. Cooper said chiller replacement was covered by his budget.
Dr. Coale said it was advisable to put money in the capital reserve for
chillers. A main chiller might cost $300,000 or a geothermal system might
be a better choice, Mr. Cooper said in response to Dr. Coale's question if
a sloping roof was installed and chillers would be phased out. Mr.
Masciandaro said these items should be worked out through the budget
process. Mr. Anspach said 30 chillers are not efficient and that discussion
the roof structure should be discussed. Mr. Weber asked about
administration recommendations regarding roofing. Mr. Cooper said the
leaking dairy roof could be redone for $20,000 to $30,000. Mr. Cooper
asked for board direction regarding the roof repair. Mr. Masciandaro
objected to discussing roof repair at the board level. Mr. Pettit said the
board was off agenda. Mr. Schroeder asked for a detailed report of
maintenance needs.
XI. PUBLIC COMMENT
There was no public comment.
RECESS
Mr. Pettit called for a five-minute recess before having the board seat
allocation discussion.
XII. BOARD SEAT ALLOCATION
Mr. Schroeder provided another recommendation (enclosed). Mr.
Schroeder made a motion to table A. Mr. Grispon seconded it. The board
voted 9-0 to table it.
Mr. Schroeder said the plan did not address the issue of balance as
closely as this new plan does. He said this plan disregarded political
aspects. He said no other plan considered balanced population as closely
as this one.
Rather than vote on the plan this evening, the board discussed putting the
plan in the newspaper, the district newsletter and district website before
voting on it.
Mrs. Stokes said that she felt that this was a great plan and she made a
motion to put the plan on the work session to be voted on as an action
plan. Mr. Masciandaro seconded the motion.
XIII. PUBLIC COMMENT
Alan Dovberg, Limerick
Asked what the impact of the board seat allocation would have on present
board members and whether anyone would be ousted. Also wanted to
know whether items were normally voted on at work sessions.
Mr. Schroeder said he didn't know who would be affected. Mr. Pettit said
items were normally voted on at work sessions. Mr. Masciandaro said two
board members, who presently represent Region II, live in Limerick IV
which would be moving into Region III. He said the original board seat
allocation committee was commissioned in August 2001, met twice,
discussed the issue at several board meetings, and voted it down. He
addressed the population differences of the three regions and said the
board had to do something. Mrs. Stokes said other districts changed their
board seat allocation since the 2000 census. The affected board members
would serve the remainder of their term, then run in their new districts, if
they chose.
The board voted 4-2 to approve putting the motion on the January work
session agenda with Mr. Grispon and Mr. Weber voting no.
Mr. Schroeder made a motion to adjourn. Mrs. Stokes seconded it. The
board adjourned.
Respectfully submitted,
Martha Magee Block
Board Secretary
Pat Dillon
Recording Clerk
Royersford, Pennsylvania December 9, 2002
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