RSU 40 approves energy bond planFY 2013 audit unveiled
Union — Regional School Unit 40 Board of Directors voted unanimously to borrow money from Androscoggin Bank for the Qualified Zone Academy Bonds funding for the Siemens Energy Management Plan it approved in November.
Eddie McLiney, chairman of McLiney and Company of Kansas City, Miss., presented the plan to the board at its Dec. 5 meeting. He has been with the firm since 1984, and is an expert on Qualified Zone Academy Bonds.
McLiney And Company has been working with school districts, cities, and other municipal governments for more than 45 years.
Following an audit by Siemens Industry, Inc., the energy-saving recommendations totaled $2,215,794 — include lighting retrofit, roof ventilation/replacement, boiler replacement, walk-in refrigeration/freezer control, heating pump replacement/repair, air conditioning, water heater replacement, and EMS upgrades, among other things.
The Maine Department of Education informed RSU 40 it will recommend the State Board of Education approve the districts application for purposes of issuance of a QZAB in the principal amount of up to $1.44 million to be used to fund the project.
When the state begins accepting applications for the next round of QZABs in a few months, the district will apply for another grant to finish the project, according to district Business Manager Karla Miller.
Siemens Industry, Inc. has proposed to enter into a contract for the project, and to commence work on or before Feb. 1, 2014 and complete the project within eight months.
The money will come from a QZAB — issued by the state or local governments — to renovate and improve eligible public schools. The federal government subsidizes the bonds by providing tax credits to the holder of the QZABs.
That means recipients of the bonds are generally responsible for repayment of just the principal.
RSU 40 procured a proposal with QZAB lease purchase financing for a term of up to 15 years at a net interest cost of 1.2 percent.
McLiney summarized the financial benefits of the tax-exempt plan.
"The federal government receives a federal tax credit in lieu of interest so basically they are subsidizing the project," said McLiney.
Under normally taxed standards the principal and interest on the bond of $1.44 million would be $127,000 per year. With the 1.2 percent tax rate offered by Androscoggin Bank that amount falls to $105,000 — saving the taxpayers $22,000 annually.
Over the life of the 15-year plan, normally it would be a cost of $474,000 to the district. However, the QZAB approach lessens that cost to $132,000 — or a 72 percent savings in interest.
The acceptance of the QZAB was the culmination of a long process that began in the spring, according to Board Chairman Danny Jackson.
"It involved a lot of work over these past several months by our Facilities Committee; Karla Miller, business manager; George Bridges, facilities director; Superintendent Michael Cormier, and others," said Jackson.
"Without the dedication of these people, the whole process would have never happened," said Jackson. "Kudos to them!"
"It's been a good process and you've all done a wonderful job on this," said board member Ann Donaldson.
The Pulling for Kids Educational Foundation has agreed to partner with RSU 40 — providing professional development training and materials for teachers and students equaling at least $232,658 or 10 percent of the proceeds of the bond issue.
QZABs may be used for rehabilitation or repair of school buildings, purchasing equipment, developing course materials, and/or training teachers and other school personnel, but not for new construction.
The new auditor for RSU 40 also presented his company's findings to the board for fiscal year 2013.
Jeremy "Hank" Farrah, with Runyon Kersteen Ouellette, pointed out that although the district is in sound financial shape, it needs to improve internal controls and procedures.
"We have been working on that since my arrival last December," said Miller. "The district is not overdrawn in any budget category and we have a healthy fund balance," she said.
Miller explained the district's accrual fund balance — after accruing all summer salaries for school year employees (a practice RSU 40 does not usually do) — is $154,609, of which $75,209 is committed for Fuel Stabilization Fund.
"There are no major issues here," said Farrah.
RSU 40 is comprised of Friendship, Union, Waldoboro, Warren, and Washington.
Courier Publications reporter Beth A. Birmingham can be reached at 594-4401 ext. 125 or via email at email@example.com.
594-4401 ext. 125
Beth rejoined Courier Publications' news staff in February 2013. She previously worked at The Courier-Gazette from 1981 to 1990.
Her coverage area includes Warren, Union, Friendship, Waldoboro, Washington, and Thomaston and RSU40.
Beth has a passion for photography, and a degree from the University of Maine at Augusta, in affiliation with the Maine Photographic Workshop in Rockport.
Aside from photography, Beth enjoys running and walks along the waterfront, as well as other outdoor activities. She has a daughter, Claire, who is 13.