The Enterprise Board of Education approved paying off its 2010 bonds at its regular meeting on Dec. 17.
The board will pay $4.285 million in January out of the General Fund reserves, which held $16.1 million at the time the decision was made.
At a Nov. 19 work session, ECS Chief Financial Officer Brian Stewart brought up the idea of paying off the bonds. He showed that at the end of the 2019 year, the system had $4.8 million in excess revenue.
He said that some of the pros of paying off the debt included saving over $1 million in interest, it would reduce the system’s long term debt to about $6.3 million and that the system should recoup the money within five years due to the reduction in debt payment.
Superintendent Greg Faught liked the idea, emphasizing that the payment would be less than the excess revenues for 2019.
“If we paid it off, we’d still be $600,000 in the black,” Faught said at the work session.
Faught said he believed that this would be the best time for the system to pay off those bonds at the work session as well.
“You know, within the budget, we had to put turf on the (football) field at $1 million so we’re not going to do that right now,” Faught said. “We want to wait on that so that’s a million dollars that we don’t plan on spending this year. So if we’re going to do something like this, I don’t think there’s going to be a better time.”
Stewart said the payment would lower the system’s operating budget from the projected 3.19 months to 2.5 months.
The system is required by the state to have one month operating budget in the general fund and recommends a school system have at least two months operating budget. The system had 2.5 months operating budget in its Fiscal Year 2018 budget.
The next Enterprise Board of Education meeting will be Jan. 28 at 6 p.m. at the Central Office on Hutchinson Street. The meeting is open to the public.