Columbus schools more than $7 million short for debt repayment
Treasurer Michael Kinnear told the Columbus School Board a fund used to pay off district debt is $7.6 million short for the year. Kinnear says money supplied to the fund comes from real-estate and personal-property taxes. Kinnear says the district is now forced to consider other options for debt payment to make up for the depleted fund.
"The tax bills went out, and there was a tax millage rate of 2.7 mills, and that's not enough to pay the debt," Kinnear says. "So we need to look at ways that we can either reduce the amount of debt that it required to be payed in this calendar year, or increase money coming in that is made available to pay the debt, so the board in considering both of those options."
The Franklin County Auditor's office is responsible for assigning the tax bills Kinnear talks about. The auditor uses numbers from the school department to set each year's millage rate. That rate determines how much property owners pay in taxes. This year the auditor set a millage rate that was 44 percent lower than last year's rate, meaning the school district collected less property taxes than last year. Franklin County Auditor Joe Testa says there are two reasons for the discrepency. The first reason:
"Some how or another, they ended up with a year-end balance in their bond fund was $4 million less than they reported to us," Testa says. "If that had not occured, the millage we ended up leveying and that, of course, the school board approved, would have been adequate to cover their debt payment this year."
Testa says the other reason for the lack of funds came in a phone conversation last December:
"In that verbal conversation between a school board employee and one of my employees, there was another miscommunication," Testa says. "They were asking for a millage number that was not heard correctly on the other end of the phone, and that is what was put in (the computer system)."
School officials did not return phone calls seeking comment about Testa's remarks.
The district is considering refinancing the debt through what is called a refunding. Esentially the district would combine its two existing bond issues into one, which would then be refinanced using current interest rates. Because current rates are lower, district officials say the refinancing could save them more $9 million. But they are hesitant because the district would be locked into the deal for at least 10 years, and rates could fall further. The district will decide on a plan at the July 20th board meeting.