JERSEY SHORE - The Jersey Shore Area School Board decided to go forward with a bond process to fund a building project using a wraparound payment structure during a special school meeting Tuesday.
The 7-1 vote - board member John Shireman was the lone vote against the approval - also appointed Public Financial Management as financial adviser and Rhoads & Sinon as bond counsel.
Before the vote, Jamie Doyle, of Public Financial Management, gave a brief summary of the bond process and the two payment options.
She explained there was "virtually no change" in the process from when she gave a similar presentation at the board's Nov. 9 meeting.
Doyle did however note that interest rates are 0.45 percent lower.
"Interest rates truly are at all-time lows," she said.
She also said not to take the drop lightly, noting, "0.45 doesn't sound like that much until you apply it to $10 million."
In order to fund renovations at Jersey Shore Elementary, the district would apply for two separate bonds - one for $10 million, the other for any other costs. Doyle explained bonds under $10 million receive lower bank qualified interest rates.
By choosing a level payment structure for the project, the district would pay an estimated $485,000 a year for the first bond of $10 million and $144,000 for the second bond locally.
By choosing a wraparound structure, the district's annual payment would decrease.
"Now for the wrap, instead of needing $485,000 you need about $268,000," she explained.
Doyle said most school districts choose the wraparound structure because of a lower millage impact. But she also warned the actual cost with interest is higher for the wraparound structure because of the lower mills - about $790,000 more.
Board member Harry Brungard questioned the true value of the renovations because an architect estimated the project to be about $10 million. Doyle explained that architects don't factor in interest, which raises the project to about $14 million.
When the board was questioned on the true savings of closing a school and doing the renovations, Board President Robert Pryor said doing so gave the district the most "bang for our buck." He explained that maintenance to the buildings was a "major factor" in the board's decision to choose the renovation project.
Though no decision was made by the board if any elementary school would be closed, Pryor did say the district would save by doing so.
"We're going to save money by closing a school because of maintenance and personnel," he said.
An Internet auction for the $10 million bond will be held Feb. 13.