The Westerville Board of Education voted against an administration recommendation Monday to borrow $28-million for capital-improvements projects using a lease-purchase arrangement for nine district buildings.

The Westerville Board of Education voted against an administration recommendation Monday to borrow $28-million for capital-improvements projects using a lease-purchase arrangement for nine district buildings.

The rejected plan, recommended by the district's administration during a Jan. 20 special meeting, would have financed $28-million over 20 years using certificates of participation and $8-million over 10 years using tax anticipation notes.

The board instead voted to finance $25-million worth of projects over 10 years using tax-anticipation notes, meaning the district will have to cut about $11-million in projects promised to voters during the May 2009 capital-improvement levy campaign.

By financing less money for a shorter period of time, the district will pay an estimated $5.5-million in interest, rather than the projected $18.5-million in interest it would have paid by using the proposed combination of certificates of participation and tax-anticipation notes.

Under the certificates of participation, the district would enter into a lease-purchase agreement with a bank and an independent third party for nine of its buildings. The district would take out a line of credit on the buildings for a period of 20 years while making annual lease payments, according to district financial consultant Patrick King, of Stifel Nicolaus.

With tax-anticipation notes, the district would borrow money based on projected tax revenue.

In addition to saving money in interest costs, board members also cited concerns over putting district buildings at risk by financing them as the reason they voted against the staff-recommended plan.

"That's something we were concerned about, the process of doing that," board member Cindy Crowe said of borrowing against district buildings.

The cost savings between the two financing options also are significant, said board member Kevin Hoffman, and the district will have more money to spend on projects if it spends less on interest.

"Those are dollars that can be reinvested in the needs of the district," he said. "There's going to be needs on an ongoing basis."

And while the district will have to cut back some of the projects put before voters during the levy campaign, Hoffman said the majority of projects voters were most interested will still get done, as will important routine maintenance projects such as roofs and HVAC.

The original alternative presented to the school board during the work session called for financing $20-million in projects, but school board members voted to raise that amount to $25-million because of concerns that the district would have to scale back what is spent for instructional materials and technology.

Now that the financing has been approved, King said he expects to go before credit-rating bureaus to get a score for the Westerville school district the week of Feb. 8. The district should have a response the following week to be able to go to bid for financing the week after that, King said.

That timeline would make money available by mid-March, treasurer Scott Gooding said, allowing the district to move forward with bidding for projects that were planned for this summer.

Administrators and the school board are scheduled to discuss planned capital-improvement projects during the next board meeting, a work session scheduled for 6 p.m. Feb. 8 in the district's administration building, 336 S. Otterbein Ave.