Ephrata schools approve defeasement

EPHRATA — According to an announcement from the Ephrata School District, the Ephrata School Board unanimously approved alterations to the district’s 2018 school bond resolution, and swore in newly elected board directors during Monday’s regular meeting.

According to the announcement, the bond resolution alterations were due to “certain state and local circumstances,” and the approval is the formal action required to defease the roughly $6.2 million of state match monies remaining from the bond

The statement explained that a bond defeasance is a process that sets aside and invests the remaining bond dollars in escrow to ensure that the principal and interest payments on the bonds are guaranteed and can be made when the bonds come due, essentially paying off the associated costs of the bond.

The decision to begin the defeasement process began in September, the statement said, when the board and administration announced a decision to place the remodel of Grant Elementary on hold due to skyrocketing costs of construction. 

“To say that we are disappointed that we cannot afford to fulfill the promises we made in the 2019 bond is an understatement,” said Ephrata School District Superintendent Tim Payne in a September announcement of the remodel halt. “We turned over every rock we could to find the money needed to complete this project. Unfortunately, it just wasn’t enough. Instead of using the bond dollars to fund other projects, we feel strongly that a new plan should be developed and presented for a vote of the people. We will follow the legal guidelines established to ensure the remaining 2019 bond dollars are set aside appropriately to partially defease and reduce the future tax levy amounts.”

With the approval of this resolution, staff can now begin the defeasance process. According to the announcement, it is estimated that taxpayers will save roughly $8.1 million in taxes over the next 15 years. This translates to between $.16 to $.48 per $1,000 of assessed value, depending on the year.

Newly elected Ephrata School Board Director, Mike Fleurkens, also took the oath of office on Monday to officially join the board. He replaces long-time School Board Director, Bill Correll, who retired in November after serving the Ephrata community for the past 37 years. 

Josh Sainsbury was also sworn in, according to the statement. This will be Sainsbury’s first full term. He was appointed to the board in 2022 to complete the remaining term of former board member Alain Black, who stepped down to coach girl's basketball at Ephrata High School.