January 20, 2020

School considers early payment of capital-outlay certificates - Daily Leader Extra : Top Stories

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School considers early payment of capital-outlay certificates

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Posted: Wednesday, January 15, 2020 2:59 pm

School district officials presented a five-year plan for Madison Central's capital outlay funds to school board members, outlining paying off most of the district's No. 6 issue of capital-outlay certificates, about $4.28 million, by the end of the 2023-24 school year.

Capital-outlay expenses are costs related to long-term assets, such as building maintenance, purchases of fixed assets including buildings and land, site improvements, and construction of buildings and building additions. South Dakota public schools also use capital-outlay money to purchase uses, textbooks, other long-term education equipment and non-coursework activities.

In his capital-outlay presentation, Mitchell Brooks, school district business manager, offered a chart on Monday that displayed capital-outlay figures from 2018 to 2026, with the numbers from the next five years calculated from predictions.

Brooks told the board members that the five-year plan was "...going forward with some projections."

For 2019-20, Brooks said that Madison Central would collect $2.558 million in capital-outlay taxes and $142,000 in other revenue, for a total of $2.7 million. The fiscal years for South Dakota school districts start on July 1 and end on June 30.

He proposed that for 2019-20, the school district should provide $447,600 in payment for No. 6 capital-outlay certificates and another $400,000 in No. 6 in prepayment funds, for a total of $847,600. The school district plans to make a $225,400 payment to a state loan program.

The total would amount to $1.07 million.

Madison Central would have another $1.6 million for other capital-outlay requirements in 2019-20. Brooks has proposed assigning that money to six other capital-outlay expenses -- educational equipment, technology, curriculum, operations and maintenance, transportation, and co-curricular. Examples of co-curricular activities include sports, art, drama and music.

Projecting forward into the 2020-21, 2021-22, 2022-23 and 2023-24 school years, Brooks estimated that Madison will collect between $2.69 million to $2.77 million in capital-outlay revenue each year.

To pay off the No. 6 capital-outlay certificates and the state loan, Brooks proposed making between $446,500 to $484,500 in regular certificate payments and $400,000 in certificate prepayments each year.

The state loan payments would amount to $225,400 annually before ending in 2023-24.

Under those projections, Madison Central would make final payments in 2024-25 on the No. 6 capital-outlay certificates of $485,195 for a regularly-scheduled payment and $400,000 in prepayment funds.

From 2020-21 to 2023-24, the school district is predicted to have between $1.62 million to $1.67 million in additional capital-outlay money each year to pay for other expenses such as student transportation and educational equipment.

Also from 2020-21 to 2023-24, Brooks calculated that the capital-outlay fund should have an annual surplus balance ranging from $381,000 to $575,500.

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