The Monroe County School Board on Tuesday voted unanimously to accept a new, lower rate of interest on its funds deposited with First State Bank of the Florida Keys, while agreeing to put the contract out to bid as soon as possible.
The decision was set in motion last month when the bank informed the School District of its intent to exercise its option to terminate the current, three-year contract due to persistently low interest rates set by the Federal Reserve.
By law, the board must put the contract out to bid, but in the interim agreed to accept the bank's offer of a floor of .05 percent, down from the current 1.05 percent. That contract, originally signed in August 2011, was set to expire March 19, at the end of the 30-day notice period provided by the bank.
There was general agreement among the board members that the bank has long been a valued corporate partner to the district and had held off making the decision until it became obvious that interest rates wouldn't be rising any time soon.
Superintendent of Schools Mark Porter said the bank "exercised an incredible amount of restraint" in holding off killing the contract.
District 4 board member John Dick agreed with Porter, saying, "They were very good about [waiting]."
However, District 3 member Ed Davidson suggested that any future bank contract take longer than 30 days to cancel. "Thirty days is just not long enough," he said. "We need more time."
He was contradicted by Dick, who pointed out that in a potentially different economic climate, the ability to demand higher interest rates quickly could be a plus for the district.
"You want to have the ability," Dick said.
Porter concurred with Dick, saying, "It could work to our advantage."
Also on Tuesday, the board voted to clarity its relationship with the Monroe County Education Foundation (MCEF), an action recommended in the recent Florida Auditor General preliminary report on the district.
John Padget, president of MCEF, called the agreement "pretty good," though he mentioned finding some of staffing issues in the agreement confusing.
Ahead of the April 2 "fact-finding" meeting between members of the district team overseeing construction of Horace O'Bryant Middle School, the builder, Coastal Construction, and Davidson, the board unanimously approved a number of change orders that Porter called "noncontroversial" and Davidson called "less controversial."
Porter noted that coming to grips with the change-orders issue was another recommendation of the Auditor General report.
That report was the subject of vigorous discussion during the workshop portion of the meeting, especially the Auditor General's finding that the district had technically defaulted on a bond issue payment relating to the HOB construction.
Board Chairman Andy Griffiths reminded the members that the holder of the debt, U.S. Bank, recently sent a letter to the district assuring outgoing Director of Finance and Performance Ken Gentile the district had never actually been in default.
That letter, and an explanation for the confusion over the issue, which was said to involve an inaccurate payment amount on the original invoice, will be attached to Porter's official response to the audit, which must be delivered to the Auditor General later this month.
Gentile explained that during the time of the bond issue, the district "had some serious issues that we were trying to rectify in our Finance Department."
Regarding the issue of the HOB parking lot, which must be expanded and modified for a certificate of occupancy to be issued to the school, outgoing Director of Operations Michael Kinneer informed the board that district architects would be submitting "biddable drawings," and that a temporary fix to the lot was in the works.
The board on Tuesday also refinanced some of its debts, through a subordinate sales-tax revenue bond, to take advantage of lower interest rates.