Belen Schools to sell its own bonds
Belen Consolidated Schools is moving forward on its own to receive funding for public school capital improvements despite a snag they hit with the New Mexico Finance Authority, which were scheduled to sell the district's bonds this past week.
The bump in the road has prolonged the time the district would've received funds for 10 projects on the district's to-do list by months, but has allowed for a larger bonding capacity to simultaneously work on more projects at one time.
The New Mexico Finance Authority announced in mid-July its 2010-11 fiscal year audit was improperly completed by a former employee.
The employee "misrepresented to senior management the status of the audit and provided financial statements for use with third parties that he falsely represented as 'audited' by NMFA's outside auditing firm," stated a July 12 NMFA news release.
As a result, NMFA delayed the offering of Series 2012B Senior Lien Public Project Revolving Fund Revenue Bonds worth $40 million, which included $10 million of general obligation bonds for Belen Schools, scheduled to be sold this past week.
These bonds are delayed until the "fraudulently prepared audit" is corrected, said Charles Casey, bond salesman for the district, at the Belen Board of Education's July 24 meeting.
"That put us dead in the water as far as the NMFA is concerned," Casey said.
Since the NMFA will be tied up with an internal audit investigation, Casey recommended the board move forward by selling the bonds on its own.
Before the district can do so, its 2010-11 audit must be completed. A draft of the audit is being reviewed internally by district administrators and is expected to be sent to the New Mexico Office of the State Auditor for approval in about a month, said George Perea, the district's director of business and finance, at the meeting.
The district will then begin working on the 2011-12 audit, which is due Nov. 15.
"Once this particular audit is completed, our auditing firm is turning around and starting audit '12 …," said Belen Superintendent Ron Marquez. "We would be on track with all of our audits, which then allows us to go out for sale of bonds on our own."
The district would then sell the bonds and potentially receive proceeds by December, Marquez said.
The delay has, however, allowed the district to increase their bonding capacity, which could cover the entire $23.75 million bond in one sale instead of the two planned through NMFA, said Board President R. Sam Chavez.
"We can be talking about simultaneously working on the community pool as well as Infinity High School as well as other projects that we have and can start looking at a lot of projects that need to get done," Chavez said.
The district may also receive a lower interest rate on bonds compared to what it would've received through NMFA and refinance old bonds at the same time, Casey said.
The $23.75 million bond, approved by voters in February 2011, to improve aging structures within the district includes a replacement wing at Dennis Chavez Elementary for $2 million, a new Family School building for $3 million, renovations to Gil Sanchez Elementary for $750,000, additional classroom space at H.T. Jaramillo Community School for $2 million, an industrial arts building at Belen Middle School for $2 million, additional classroom space at La Merced Elementary for $2 million and an indoor community swimming pool at Belen High School for $8 million.
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