The Washougal School Board is considering paying off a loan early to save money on interest payments.
In 2001, the district purchased the 30-acre Kerr Property as a future school site. It is located behind its office at Evergreen Way, and was purchased for $1.85 million through a loan at what was then known as First Independent Bank.
Rosann Lassman, business manager, said after doing some research, she realized the loan could be paid off with impact fees.
“We have $780,000 left to pay, with $101,000 left in interest,” she said. “We would save $91,000 if we paid it by Sept. 1.”
Impact fees are given to districts when new housing developments are built. There are very strict guidelines regarding how the money is used: A district may use impact fees for construction of new schools, purchase of portable buildings used for core academic classes, or nonacademic facilities such as parking, cafeteria space and athletic fields, as long as the projects are linked to enrollment increases generated by new development.
Currently, the district has $680,000 in fees, which must be used within six years. More than $500,000 has been there since the 2007-08 school year, which means it would expire in 2014.
“The sooner you act, the less interest we pay,” Lassman said. “You can put it off, but every month we pay more. It seems like paying off debt is the best way to save money.”
In order to fully pay off the loan, the district would need to take out a $110,000 general fund loan, which Lassman estimates can be paid off in a year with incoming impact fees. The estimated interest cost would be $660.
“It seems to be that saving $91,000 makes great sense,” said Blaine Peterson, board chair.
Board member Karen Rubino agreed.
“It sounds like a logical way to get rid of the debt,” she said.
Board members Terrie Hutchins and Ron Dinius asked for more time to review the request.
“I just want to make sure we are spending the public’s money wisely,” Dinius said.