Hopewell Schools Could Face Additional Payments for Renovations
By Staff Reports
Oct 15, 2012, 14:24
The Hopewell School Board considered a possible interest payment of almost $50,000 on the $24 million spent to renovate Hopewell High School during their regular meeting on Thursday.
Assistant Superintendent for Administration, Ray Watson, said that due to legislation that would implement sequestration, the school may have to pay back interest on loans that were not in the budget and interest rates that were set over a year ago.
Should the federal government fail to reach a budget agreement, triggering mandatory spending cuts arrived at following debt ceiling negotiations, it could create trouble for local schools. Should sequestration take place, there will be a 7.8 percent reduction in funding for non-defense discretionary programs.
Watson said one of the items facing a cut could be federally subsidized loans that the school division received in March of 2011 as part of the Qualified School Construction Bonds.
Should the federal government cut these loans, Hopewell could face a repayment of $48,567 in interest payments on the three loans, which currently sit at two loans at zero percent interest and one loan at 1.83 percent interest.
“These are the loans you were promised and the city council was promised,” Watson said.
The effects of sequestration could hurt the division.
“It would make us pay back $48,567 in interest payments that we were not anticipating to pay,” School Division Communication Specialist, Brian Capaldo, stated in an email.
Prince George schools are also bracing for possible cuts. According to a statement Secretary of Education Arnie Duncan made to the Senate Appropriations Committee, sequestration would cut $90 million from the Impact Aid program, designed to offer support to school divisions with large numbers of federally connected children, a group that includes military children. Duncan also noted that cuts to the Impact Aid program would go into effect sooner than some of the others on the table.
At their meeting on Monday night, the Prince George County School Board considered the effect it might have on their division, which would experience a budget shortfall due to the cuts.
At the Hopewell meeting, Watson also presented a rough estimate of the budget for the next fiscal year, noting it will be very tight one.
Watson said the biggest focus of that next budget cycle is to replace many of the buses for the school division. Many of the division’s buses date back to 1996 and need to be replaced. He said that they currently meet state safety requirements, but noted that becomes harder each year they stay on the roads.
Watson is considering various programs that would allow the division to exchange the old buses for money to go towards new buses for the schools.
“We need to work on the budget,” Watson said. “...it will be a rough start to the budget process.”