District to borrow money for renovation work

The school district expects to have to repay $4,040,000 of the debt.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- The Youngstown Board of Education is borrowing $5,050,000 to finance additional renovation work at Chaney High School and Choffin Career & amp; Technical Center.
That work, including things such as window replacement, new boilers and perhaps parking lot improvements, is in addition to the $25.5 million for Chaney, located on the city's West Side, and $10.4 million for Choffin, located on East Wood Street, already earmarked as part of a $202 million building construction and renovation project, said Anthony DeNiro, assistant superintendent of school business affairs.
The state is picking up about 80 percent of the $202 million project.
The additional improvements need to be made, and there wasn't money in the overall construction account to cover the work, DeNiro said at Tuesday's board meeting.
Interest free
Youngstown is getting the $5,050,000 interest free and actually won't have to repay the entire amount.
The board approved a plan to tap into the state Qualified Zone Academy Bond program that will have the federal government pick up the interest on the $5,050,000 bond by issuing a federal tax credit in lieu of interest to Bank of America, which is buying Youngstown's bond.
Carolyn Funk, district treasurer, said the deal with Bank of America requires the school district to make an immediate $500,000 first payment on the debt.
That money will go into a special interest-earning account and the district will continue to make smaller annual payments into that account over 16 years until it has repaid $4,040,000 of the principal, she said.
At that point, the interest earned should be sufficient to cover the remaining debt, she said.
Requirement
Youngstown will have to take the first $500,000 payment out of this year's general fund, Funk said, noting that she had predicted a $1.1 million carry-over at the end of this school year.
The state QZAB program requires the school district to have a private partner who puts up an amount equal to at least 10 percent of the money being borrowed.
Funk said the KnowledgeWorks Foundation gave the district a $2.1 million grant to use as the local share for the QZAB bond.
Education foundation
In other business, the board passed a resolution creating the Youngstown City Schools Education Foundation to raise funds for scholarships and various projects the district can't afford to pay for out of its general fund.
Proceeds from the first district Report-Out Dinner, held earlier this month, will be channeled into the fund as will the interest earned by $3 million from the sale of district-owned Anthem stock.
The $3 million will remain in the general fund, but the interest it generates, about $72,000 a year, will go into the foundation to be used primarily for scholarships for minority students.
gwin@vindy.com