The Arcola School Board is taking an innovative approach to financing the upcoming elementary construction project. The total, estimated project cost is $2,700,000. This includes construction contracts, architect and construction management fees, and all miscellaneous items. The Board recently approved purchasing their own debt certificates from the district’s fund balance reserves. Basically, the district is borrowing $2,750,200 from the education fund reserves and will make an annual payment of $250,000 back into the Education Fund from the Capital Improvement Fund over a period of years. This annual payment includes both the principal amount plus interest. Revenue from the Capital Improvement Fund comes from the 1% sales tax revenue.
Once the debt certificates are paid off, the district will have repaid the $2,750,200 plus $750,000 in interest into the education fund totaling $3,500,000! That also means that if the district had gone to an outside lender, the district would have paid the lender that $750,000 in interest! When you think of it that way, the district was able to do $750,000 in additional work to the elementary school because of being a financially stable school district.