The Avilla Board of Education approved a proposal to borrow $250,000 to help pay for a new tornado safe room and other related improvements that will allow the school to use the safe room as a cafeteria and auxiliary gymnasium.
Board members looked over a proposal from L.J. Hart & Company for about two and a half hours on Thursday before agreeing to a lease-purchase agreement that calls for paying back the money in a maximum of 10 years.
No one from the public attended a public hearing that was held before the board went into a special session to consider the proposal.
Representatives of L.J. Hart encourage the board to accept the proposal they brought, which allows them to borrow the money at an average of just over 3 percent interest over the 10-year life of the lease, and allows the board to pay off the entire debt after March 1, 2016 if they have the money to do so.
Board members said deciding to borrow money was tough because the district has remained debt free for much of its history.
They said they were still working out the details of the construction and equipment and didn't know if they would need to borrow $250,000.
Leroy Winkle, with L.J. Hart, said the interest rate would likely go up if the board delayed their decision because rates are climbing on nervousness about whether the Federal Reserve will work to keep them low.
“The interest rate in this case will not be less if you wait,” Winkle said. “If we come back and you only need $230,000, the way rates are trending, you might pay just as much in interest for the smaller amount.”
In January, the district was awarded a $600,000 matching federal grant to build a tornado safe room that would withstand the forces of an EF5 tornado and hold all the students and staff at the school, and some residents of Avilla.
Of that grant, FEMA will provide $450,000 and the district is responsible for $150,000.
The district is looking at plans to make the safe room a little larger than the Federal Emergency Management Agency recommended so it could be used as an auxiliary gymnasium with a half-court basketball court and cafeteria. They also plan to build a new kitchen to serve the cafeteria, and convert some of the existing kitchen for a small classroom.
The rest of the kitchen would be used as a concession stand for the existing gymnasium.
Estimated cost for the project is $1.2 million, with the grant paying for $450,000.
Under the lease-purchase agreement, the district's payments would fluctuate based on the interest due that year. Payments would range from $28,737 in 2020 to $32,925 in 2021.
The last payment would be due in 2023, if the district decides not to pay it off early.