Crook schools to take out $1M loan for upgrades
District hopes to save money with new buses, equipment
By Rachael Scarborough King / The Bulletin
Published: April 13. 2007 5:00AM PST
PRINEVILLE — The Crook County School District plans to use a $1 million loan to spruce up its bus fleet and save money on trash disposal.
The school board decided at its last regular meeting to take out a Qualified Zone Academy Bond from Kansas City, Mo., investment bank McLiney and Co. The bond is backed by the federal government and offers a low interest rate, in this case 1.34 percent annually.
Crook County Superintendent Steve Swisher said the loan is supposed to be used for projects that will save money for the district. For example, when the school district took out the same type of loan two years ago, it updated its energy and lighting system, which saved money.
Additionally, the federal government offers incentives to the banks involved, which means that the district probably will not have to repay the full $1 million.
“The money we’ve saved from energy savings goes to pay the loan, and actually we’re saving more than the cost of the loan, so that’s the kind of stuff you look for to make this successful,” Swisher said.
He added that the school district is still repaying the first loan of $1 million, but will only have to return about $700,000 because of the government incentives and savings. With the energy upgrades, “we’ll actually see a net gain of over a million dollars,” he said.
With this bond, the district plans to buy five new school buses and at least two Dumpster-size trash compactors. It will also continue work on its fiber-optic telecommunications system, which should reduce costs for phone lines.
The state will also reimburse a percentage of capital spending on the part of the school district, Swisher said, so new buses are a good investment.
“It’s an incentive to keep our fleet up to speed, so basically we get the cost of the bus back in 10 years,” he said. “It’s just you have to have the upfront money to buy them.”
Swisher said the district has between 30 and 40 buses, and their average age is 12 years. The new buses will be bought over a five-year period.
“At the moment, of course, the goal is keep them at 10 years and then replace them, so they’re older than we would like them to be,” he said.
The trash compactors would also cut costs by reducing the volume of material sent to the landfill, Swisher said. The district’s plans call for two compactors at first, one at the high school and one at the middle school, and potentially a third in the future to serve the elementary schools.
Swisher said the school district will repay the loan over 15 years. He added that officials will probably apply for another Qualified Zone Academy Bond next year.
“As long as we find things that we have a need for that give us the kind of investment like this,” the district will take out another loan, he said. “Basically we need a cash-flow savings to do that — to pay back the principal, but when they’re extremely low-interest or no-interest loans, it’s quite an advantage to us.”