Belen Schools bond sale delayed due to audit


Belen Consolidated Schools will be delaying the sale of $13 million worth of bonds by a few months to receive the best interest rate on the sale of those General Obligation Bonds.

Belen Consolidated Schools will be delaying the sale of $13 million worth of bonds by a few months to receive the best interest rate on the sale of those General Obligation Bonds.

This decision was made after school officials learned the last two unfavorable audits would cause Belen Schools to receive a poor rating from a bond rating agency, which would result in a higher interest rate for the district.

This may be reversed once the district received a "favorable opinion" from the 2011-12 audit, which is more than two weeks late to the New Mexico Office of the State Auditor.

"For the benefit of the entire community, and as a wise choice for spending our tax dollars, we, as a finance committee, gave the go-ahead to let's wait until the audit is completed," Board President Sam Chavez told school officials recently.

"That's all it is," he said. "Just a few more months until everything falls into place with our audit that should be completed very shortly."

The bonds will cover seven much needed public school capital improvement projects throughout the district.

Board members were informed by the district's bond financial advisor, Charles Casey, that the district might not receive a favorable rating by the credit rating agency, Moody's Investors Service, Inc.

Without a favorable rating from Moody's, it was feared the district wouldn't receive the best interest rate possible when selling their bonds.

The unfavorable rating was due to the district's last two audits, from 2009-10 and 2010-11, receiving disclaimer opinions by an independent financial auditor, Accounting & Consulting Group, LLP. A disclaimer audit is when auditors can't complete an accurate audit report and, therefore, can't state the district's financial status.

The Albuquerque-based firm assigned Belen Schools this opinion due to accounting errors, a lack of internal controls, an incomplete transfer of accounting information to a new accounting software, involvement of three financial consultants from separate firms with a hands-on approach and a change in the business and finance director's position, three times, the department's staff and the superintendent, said George Perea, the district business and finance director.

However, the district may receive a more favorable rating from Moody's if they hold off until auditors have given their opinion on the 2011-12 audit, which Chavez said should be a vast improvement.

"That audit should be very favorable and it's going to be a drastic improvement from what we've seen the last couple of years, and when that happens, our rating with Moody's would be enhanced," Chavez said. "That being said we would be paying a lower rate on our bonds."

The 2011-12 audit, which was due to the New Mexico Office of the State Auditor on Nov. 15, has not yet been submitted. The district's goal is to submit the audit by Dec. 10.

School administrators aren't concerned with the audit being late, but are instead focused on assuring the audit is up to par to receive a favorable opinion, said Superintendent Ron Marquez.

"We don't want a disclaimer report again, so we're taking the time to cross our t's and dot our i's, and double check our numbers before we submit it to our auditors," Marquez said.

Delaying the sale of bonds wouldn't affect the district moving forward with slated projects, since start-up costs are minimal, Chavez said.

"We have enough funds to keep us operating for the near future without selling our bonds," he said.

This will not push back the ground breaking ceremony for the Belen High School's natatorium scheduled for 1 p.m., Tuesday, Dec. 11, at the former tennis courts.

"The community has been waiting a long time on this and we need to let them know that we are serious about that pool," Chavez 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, a new Family School building, renovations to Gil Sanchez Elementary, additional classroom space at H.T. Jaramillo Community School, an industrial arts building at Belen Middle School, additional classroom space at La Merced Elementary and an indoor community swimming pool at Belen High School.

With these upcoming construction projects, the district will mandate contractors to have anywhere from 25 percent to 40 percent of their workforce made up of Valencia County residents, Chavez said.

This will be a requirement added onto the bid specifications contractors will bid for.

"We have a lot of parents in this district that are without jobs," Chavez said. "We are going to do our best to try to get them involved and get them hired in some of the jobs that are being done here in the community."

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