A refinancing proposal could save the Chadron Public School District thousands of dollars if approved by the board.
Board member Boone Huffman presented the proposals to the full board last week, explaining that the refinancing proposal would lower the cost of the district’s performance contract.
The performance contract guaranteed energy savings on upgrades to lighting, weatherization and HVAC systems at the middle school. The savings in energy payments is guaranteed to cover the cost of the contract payments and runs through Oct. 30, 2029. Refinancing would convert the performance contract to a lease purchase one and compress the payment schedule down to seven years, with the bulk of the savings coming from paying off the contract early.
“We wanted to bring it tonight to get everybody’s input,” Huffman said.
The proposals would save the district $35,000-$135,000 depending on the specific proposal the board approves, he continued. Board President Tom Menke noted that he would like to see the perfor-mance contract paid off earlier but expressed concerns that refinancing the project would limit the district’s financial flexibility, particularly in December and May.
“Those are our cash-strapped months,” Menke said.
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If the board elects to move forward with the refinancing, it will have to be committed to doing every-thing possible to avoid using the district’s line of credit, said board member Gary Hoffman.
“You might have to say no to some things in the future,” he said. “That’s unpleasant.”
Board member Sandy Roes inquired about the possibility of leaving the financing as it currently exists and making additional payments at the end of each fiscal year as the budget allows, believing that could give the district more flexibility. That option, however, would cost the district a 3% prepayment fee, Huffman said.
“What can we do with that $135,000 in seven years?” Huffman asked. “Who do we want to have it, the kids or the banks. That’s the way I look at it.”
The district can’t refinance the performance contract until October so the board will continue re-searching the issue and make a decision in the coming months.
“I’m glad we’re looking outside the box at different options,” Menke said.