East Grand OKs lease-purchase agreement to fund security improvements
The East Grand School District has approved a certificate of participation to fund its contribution for $8 million in security upgrades.
Last year, the board of education obtained a $2.1 million BEST Grant from the state for safety and security improvements at the school district. Under the terms of the grant, East Grand was required to come up with $5.9 million in matching funds.
Part of the contribution is being paid from the district’s reserves, but there are not sufficient funds to cover the full $5.9 million. The district is therefore using a COP for its contribution with the BEST projects.
The COP approved by district officials last month is a lease-purchase agreement. In it, the district will convey a long-term leasehold interest in Fraser Valley Elementary to lender Zions Bancorporation for a lump sum payment up to $6 million.
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The district will then sublease the property back from the lender for a term not to exceed 21 years and payments not exceeding $7.8 million. Annual payments are capped at $416,000 and will be paid through general operating funds.
If the district fails to allocate the funds needed annually for the sublease, the lender could revoke the district’s possession of Fraser Valley Elementary.
By using a COP to raise money for the grant, the district was able to generate funds that are not considered a debt. The payments come from current expenditures, so the board did not have to obtain voter approval.
However, a COP is typically used as a temporary funding mechanism before the district goes to voters to approve a bond or mill levy override. The district has previously suggested it might go to voters in the fall for such a move and that it could be for upgrades beyond security.
At last month’s school board meeting, Superintendent Frank Reeves said district officials are still considering the community’s mood for a mill levy or bond. He pointed out any ballot measure would take into account the economic hardships facing the community due to the COVID-19 pandemic.
Updates to be completed with the BEST Grant and matching funds include relocating the main offices at Fraser Valley Elementary and East Grand Middle School to provide more secure building entrances and updating video and speaker systems at those schools.
At Middle Park High School and Fraser Valley Elementary, the district will also be expanding the fire suppression sprinkler systems.
District wide upgrades include improvements to video surveillance systems, installing a public address/mass notification system, adding new door hardware that complies with state and federal guidelines, and installing card-reader access control at all facilities.
Early work on the upgrades was meant to start over spring break, but crews got an early start after schools closed due to the COVID-19 pandemic. Work is expected to continue through the summer, and the district plans for construction to be completed before school starts in August.
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