Lockport City School District profits $3 million in capital project
During Wednesday’s Board of Education meeting, board members heard from Rick Ganci, an advisor for Capital Market, who is the district’s financial advisors.
Ganci said because of terrific market conditions, they would receive $3.3 million over the next 15 years. The bulk of that money has been given up front.
“It works out well for the district,” said Ganci.
The 2008 capital improvement project was approved for $23.5 million. The project finished last fall. With principal and interest, the district will pay a little more than $24.9 million.
Ganci said New York state will pay the district around $28 million for the project in building aid, because of interest rates. On the money the district borrowed, Lockport was able to get interest rates less than one percent. The project is paid based on a fixed three percent rate.
Another benefit, according to Ganci, was the district’s capital reserve fund. Because they had money set aside, they were able to use $2.1 million and not have to borrow all of the money for the project on day one.
Superintendent Michelle Bradley said the high number of building aid helped the district craft their 2012-13 budget, because they received $1.7 million.
She said in the future they can’t rely on state aid and going to tax payers, so they need to come up with “innovative ways” the district can help close the budget gap.
“For Lockport this might be one,” she said.
Ganci said the state does not have the three percent fixed interest anymore; it is based on the average rate of all deals done throughout the state. But currently, he said, the fixed rate is around 2.625 percent, which could still make the district a profit if they find a lower interest rate.