Herald JournalHerald Journal, Sept. 22, 2003

LP school levy to decrease 17 percent

By Ryan Gueningsman

The Lester Prairie school district's levy for the next year will decrease by about 17 percent, or almost $54,000.

"Taxpayers won't pay quite as much taxes next year," said Lester Prairie Schools Supt. James Redfield after the meeting.

There are three main reasons it is decreasing, Redfield said. The lack of spending funds levied for three things ­ unemployment compensation, community education, and health and safety ­ is the reason the levy is decreasing.

School districts try to levy out as much as 18 months in advance, Redfield said. There hasn't been as much money spent in those three areas as was levied for them.

"We haven't been able to get the community education program going as good as we'd like, and although we've had some compensation issues, it hasn't been as much as projected," he said.

There have been several unemployment compensation issues, but most people end up getting a different job,and the district has not had to pay as much as has been levied.

The health and safety fund has also had more funds levied than have been needed in recent years, he said.

This year's payable levy was $311,447. The 2003-04 amount is $257,702 ­ a 17 percent decrease.

"It's levying less locally, and getting a larger portion from the state," said board member Barry Kyllo.

Refinancing bonds

The Lester Prairie School Board refinanced its bonds, which will result in a savings of about $80,000 in interest ­ double what the projected savings was.

"Thankfully, the market has been going with us," said Bob Winthrop of the PFM Group, the school district's financial advisors.

The bond will refund $995,000 of the district's outstanding $1,280,000 bonds, issued in 1993.

In August, the board was told that if it refinanced the bond, it could save around $43,000 from 2004-2012. Because of the low interest rate now, the school district was able to get a higher savings.

"Instead of that $4,000 to $5,000 a year for those 10 years, it's going to be about $7,000 to $12,000 a year," Winthrop said.

There were two options to pay off the old bonds. The refund amount will be $995,000 of the district's outstanding $1,280,000.

"We need that $995,000 Feb. 1, 2004," Winthrop said. "What we could do is make sure we have the $995,000 in the bank on Nov. 5 (delivery date of the bonds), so we have enough to pay off those bonds Feb. 1."

The second option is having a little less than $995,000, and plan on earning interest on that money from Nov. 5 to Feb. 1, so there is not as much to pay for, he said.

Option number two is what the school district opted to do. The bond will be refinanced by Wells Fargo Brokerage Services, LLC of Minneapolis who had the low bid.

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