East Grand School Board moves ahead with plans to borrow several million for safety, security project
After several weeks of difficult deliberations East Grand School District’s Board of Education has come to a decision regarding its plans to obtain a multimillion-dollar grant from the state of Colorado.
Last week East Grand’s Board of Education chose to move forward with plans to obtain a $2.1 million BEST grant from the State of Colorado. The funds from the BEST grant will be leveraged along with several million dollars in additional funds to complete a multi-million dollar safety and security improvement project for the school district.
The BEST grant itself came with several stipulations that forced East Grand to make a decision on the subject in late June. Under the terms of the BEST grant East Grand was required to come up with $5.9 million in matching funds to leverage the $2.1 million from the BEST grant.
District officials noted the state did not require the district to obtain the full $5.9 million prior to dispersal of any grant funds but did require that East Grand develop a specific plan regarding from where those funds would be derived. According to East Grand Superintendent Frank Reeves district officials needed to provide their plan for the $5.9 million in matching funds by July 1 or risk losing the grant award.
During the June 18 meeting, the Board of Education voted to move forward and obtain the BEST grant and to use both district reserve funds and funds borrowed through a Certificate of Participation, often referred to as a COP, to come up with the additional $5.9 million required by the state.
According to Reeves, the district currently has a reserve fund totaling between $5.7 and $5.8 million. Reeves said the district plans to use up to $1.8 million of those reserves and would then look to borrow approximately $4 million in additional funds through a COP.
Reeves said the district would expect to save roughly $200,000 to $300,000 by applying the district’s reserves funds to the project, which would lower the principal borrowed by the district and push back the beginning date at which the district would enter into a COP — at which time they would begin accruing interest.
The funds from the BEST grant, district reserves and COP will be applied to a safety and security improvement project that will include the installation of new locks, exterior key fob systems and additional security camera improvements among other aspects. The majority of the work, roughly 75% according to Reeves, will be focused on physical construction at East Grand Middle School and Fraser Valley Elementary to improve security at the main entryways for those buildings.
A COP is a school financing mechanism that is analogous to a lease purchase agreement. Unlike other school funding mechanisms such as a GO Bond, which are not paid out of district operating funds, the money borrowed by the school through the COP will be paid through general operating funds. Unlike other funding mechanisms, such as a GO Bond and a Mill Levy Override, schools districts can unilaterally approve COP financing options and are not required to obtain prior voter approval.
Because of this dynamic a COP is typically used as an interim funding mechanism and districts often look to voter approved GO Bonds or Mill Levy Overrides to cover repayment costs of a COP. Reeves said the district tentatively plans to come to the voters of East Grand in 2020 to seek approval for a GO Bond that will cover the repayment costs of the COP.
The District may also seek approval of a bond for several million in additional funds, above and beyond the roughly $4 million anticipated for the COP, to apply towards a capital improvement project which developed out of the district’s master planning process. District officials are planning to initiate a community engagement and information campaign next school year informing the public about the capital improvement needs of the district.
Based on those conversations district officials expect to develop a plan regarding what types of capital improvements district voters would be willing to support. The district would then look to develop a GO Bond question for the 2020 ballot that would reflect what they believe voters will support.
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The Open Lands, Rivers and Trails fund made significant investments in five projects for the fall grant cycle.