New cash advance policy proposed

WORLAND — The Washakie County School District No. 1 Board of Trustees Monday night approved an amendment to the Worland Aquatic Center Joint Powers Board agreement and a new policy proposal in hopes of allowing the board an avenue to access some of the endowment funds.

During Monday’s board meeting, the school board unanimously approved the amendment, which still needs approval of the Washakie County commissioners and Worland City Council and would then need to be reviewed by the Wyoming Attorney General’s Office.

The amendment would raise the debt level for the joint powers board from $50,000 to $160,000.

The policy addresses the issue of the joint powers board accessing endowment funds for operational costs if necessary.

BACKGROUND

During the 2010 election, Washakie County voters approved a special 1 percent sales tax to raise about $3.7 million for an endowment and it raised $4.45 million, or an additional $750,000.

The current agreement states, “Should the Endowment Fund exceed $3,700,000 in value, the interest and other income revenues on the excess value shall be split equally by and between the Joint Powers Board to support operations of the facility, and with one-half remaining in the Endowment Funds for purposes of generating additional income for major maintenance purposes.”

The interest, however, at just under 1 percent, is only generating about $15,000 to $16,000, Stott said.

The question of accessing the excess funds first arose back in November 2015. At that time the joint powers board proposed a no-interest loan, which was approved by the District No. 1 school board, but rejected by the county and the city.

A working group was formed that met in the early part of 2016. An agreement came forward to the school board in late 2016 for a cash advanced policy. The city and county did not take action on the policy, instead a meeting was held last month to discuss the policy. A new proposal was submitted at the meeting allowing for advances of up to $25,000 annually.

There were concerns about having the money being paid back and who would be responsible if the joint powers board was terminated. It was determined that with the school district the custodian of the aquatic center endowment funds, and owning the land, then they would ultimately be responsible.

The new policy as approved by the school board Monday would allow for the WAC Joint Powers Board to request funds from the school district with requests limited to $20,000 annually and an aggregate outstanding total of $160,000.

Also included in the policy is a trigger point of $40,000. Stott said if interest rates generate enough funds for the joint powers board to receive $40,000 in interest funds for operations, then “100 percent of the remaining interest earnings from the operating endowment will be retained to repay any outstanding cash advance balance.” If there is no outstanding balances, then further revenues on the operation portion of the endowment will be distributed to the aquatic center.

Stott said, “One of our goals is to protect the integrity of the endowment.” Once the endowment has generated enough income to kick $40,000 operating cash to the joint powers board then any debt is paid off.

Stott said this year interest rates are raising about $15,000 to $16,000 and next year he anticipates it in the $20,000 range. He said interest rates between 1.75 percent and 1.9 percent would generate the $40,000 needed for the trigger.

Chairman Don Bryant said, “Let’s hope with this we can all go forward and work together as joint powers board.”

Stott added, “The pool right now is in as good a financial position as it’s ever been and the prospects for the future are bright.”