The Chester Area School District will be saving local taxpayers $30,000 with a decision made by the school board a week ago.

With around $2 million in the district's capital outlay fund, school board members felt it was an appropriate time to pay off 2012 capital outlay certificates, according to school Superintendent Heath Larson. The district is paying off $435,000 in principal and $3,767.36 in interest.

"Our district will be debt-free following this payment," Larson indicated.

The certificates were issued in 2012 to raise funds to construct the school district's ag facility, middle school locker rooms and concessions area. The district initially borrowed $970,000 for this project.

Larson explained that in recent years, the funding formula for capital outlay has become increasingly more complex. The amount levied can be based on a number of factors, including student headcount and property values.

"It really varies," he said, explaining that districts differ and the formula used is based on the attributes of individual districts.

At the present time, no major projects are planned for the Chester Area School. However, ongoing maintenance is a priority for the district.

"We're always looking at ways to keep our building and grounds updated and looking good," Larson indicated.

By law, a school district's capital outlay funds can be used to purchase land; improve grounds; construct, remodel or maintain facilities; and lease or purchase equipment, including textbooks and software. In addition, a school district can cover transportation costs with capital outlay funds.

However, a school district can also transfer up to 45% of the taxes collected into its general fund. This is known as "capital outlay flexibility." The Chester district does take advantage of this, according to Larson.

"It can get really complicated," Larson said in speaking about the way a school district deals with funding issues.