Superintendent outlines plan to spend lease‑purchase funds; warns of arbitrage penalty if unused
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Summary
Superintendent Dr. Collins said the district received $35 million from a lease purchase, generated about $1 million in interest, and must spend remaining interest quickly to avoid an estimated $377,000 arbitrage penalty; proposed uses include a high‑school parking lot, district office roof repairs and buyouts of vehicle leases.
Superintendent Dr. Collins updated the board on spending options for interest generated by a $35 million lease‑purchase related to Lewis Elementary construction. Collins said the district invested the lease proceeds and that investment earnings produced “just over a million dollars” in interest; state or federal rules on tax‑exempt financing mean the district must spend the funds within a prescribed window or face an arbitrage fee Collins estimated at about $377,000.
Collins outlined candidate uses for the remaining interest funds: resurfacing the high‑school parking lot (an estimated $800,000), replacing the district office roof (approximately $280,000 was cited as the roof estimate), purchasing leased vehicles to avoid ongoing lease payments and smaller facility items (for example, cafeteria tables already purchased and wall treatments to match other elementary renovations). He told the board that all proposed outlays must be facility capital expenditures that fit the lease‑purchase spending rules. “We have to actually have it spent and a check sent to them before the 25 next month,” Collins said, explaining the compressed timetable.
Nut graf: Collins sought board input on priorities because failing to spend the interest in time would trigger a large arbitrage charge; administrators emphasized the need to select eligible facility projects quickly and to accept competitive bids that may alter line‑item allocations.
Trustees asked whether storm damage or other emergency criteria might change project choices; Collins said the selected projects are primarily age‑related repairs and that facilities review is required to confirm eligibility. He also reported a law‑enforcement update on a prior vendor‑fraud matter: Clay County authorities have located a suspect but extradition and recovery of funds are unlikely.
Ending: the superintendent said staff will pursue facility bids and return to the board quickly with firm project costs so the district can apply the interest proceeds where allowed and avoid the arbitrage penalty.
