Times Observer file photo by Brian Ferry The Qualified Zone Academy Bond (QZAB) approved by the Warren County School Board on Wednesday will provide additional funds to renovations at Warren Area High School.

The Warren County School Board held a special meeting on Wednesday afternoon to approve a revised Qualified Zone Academy Bond (QZAB) resolution for Warren Area High School and beyond construction costs.

QZABs, financial instruments created by Congress in 1997, “help schools raise funds to renovate and repair buildings, invest in equipment and up to date technology, develop challenging curriculum, and train quality teachers,” as well as “encourage schools and businesses to cooperate in innovative ways that expand students’ learning opportunities and help schools prepare students with the kinds of skills employers, and our nation, need to compete in the global economy,” according to the U.S. Department of Education website.

The funds accrued by the QZAB agreement total $2,522,000. These funds will be used towards the ongoing renovation project at Warren Area High School, as well as the future project at the Warren County Career Center. Documentation provided by the District includes the following passage: ” At least ninety-five percent (95%) of the proceeds of the Bonds will be used to rehabilitate the School or provide equipment for use at the High School (WAHS).

Jamie Doyle, Managing Director of  PFM Group Financial Advisory, participated in the meeting via conference call. Doyle told the board that accepting this resolution would be “in their best interest.”

“You will pay no interest whatsoever on this agreement,” Doyle told the board. “I believe this is a very attractive offer.”

The $2,522,000 borrowed by the board  will be paid back over a 15 year time frame, with one payment made per year until 2031.  The documentation provided by the District shows zero interest being added – meaning the amount paid back will also be $2,522,000.

“What purpose does providing a zero-interest loan serve for the bank?”, asked board member Richard Zamborik.

“The bank is motivated by things other than interest rates,” Doyle replied. “In this case, they will get tax credit rates. This does not affect you (the board) at all.”

The documentation provided by the District shows a tax credit rate of 4.59% for a 15-year QZAB.

Zamborik then mentioned that the agreement was “as close as we will ever get to free money.”

“Like I said before, this is a very attractive offer,” Doyle said. “If there’s any downside to it, it’s the 15 year payback plan.”

Board Vice President Arthur Stewart asked Doyle if the board should consider  requesting another QZAB before the end of the year.

“I don’t think we’re scared by the 15-year plan,” said Stewart. “We had originally set our sights on borrowing five million. We’ve been so spoiled by the QZABs, my question would be, would it behoove us to try to harvest one more apple off of the tree before the end of the year?”.

Doyle responded by recommending that the focus remain on the current resolution, saying, “This was a good solution because we were running out of time at the end of the year.”

The board then unanimously approved the revised resolution.