Huntington School District’s Long-Term Debt Dwindles

The Huntington School District’s long-term debt is dwindling. The debt declined by about one-third over the past year and is now among the lowest of any district of comparable size on Long Island.

Huntington’s trustees have utilized a pay-as-you-go philosophy for capital improvements and exercised conservative budgeting practices.

“Last year alone, the savings associated with reduced debt service allowed Huntington to much more capably address significant increases in mandated non-discretionary within the current year’s budget,” Superintendent James W. Polansky said.  “In the present financial climate, a conservative approach and the ongoing reduction of debt principal and interest costs will undoubtedly continue to benefit our taxpayers.”

An analysis of the district’s latest financial statements dated June 30, 2013 indicates the district has a relatively low level of long-term debt that continues to drop rapidly. Entering the current school year, Huntington owed just $2,480,000 in principal and $792,088 of interest for a total debt as of July 1, 2013 of $3,272,088.

The district will retire another $248,450 of long-term debt the 2013/14 school year, including $145,000 in principal and $103,450 of interest. Another $247,469 will be paid off in 2014/15, $251,281 in 2015/16, $249,681 in 2016/17, $247,875 in 2017/18 and $250,863 in 2018/19.

By July 1, 2019, the district’s debt will have been nearly paid off. The total debt will continue to plummet each year through the 2025/26 school year. By June 30, 2026 the district will have completely extinguished its long-term debt.

Huntington has been dramatically reducing its debt in recent years. As of June 30, 2009 the district had a total bonded debt of $6,370,000. That figure declined to $5,465,000 in 2010 and $4,515,000 in 2011. As of June 30, 2012 the district’s bonded debt stood at $3,525,000 and then dropped by more than $1 million over the following year.

While there has been fairly regular turnover on the Huntington School Board over the past three decades, trustees have maintained a consistent distaste for assuming higher levels of debt and use of budgetary gimmicks or excessively optimistic fiscal forecasts.

Trustees have earmarked millions of dollars to finance renovation and reconstruction projects through a voter approved capital reserve fund. Through the utilization of property taxes already paid, the district has saved taxpayers millions of dollars in debt service while still addressing Huntington’s capital project needs.

The district also has $1,576,163 of “installment” debt related to an energy performance contract project that funded the installation of energy efficient windows and doors, lighting, heating and ventilation equipment, etc.

The annual principal repayment and interest costs of the EPC are paid for through the savings generated as a result of the more efficient equipment. The district is retired nearly $300,000 of EPC installment debt over the past year. The length of the energy performance contract is 16 years. Final maturity is set for 2021.