Vermilion Parish School Board thinking twice about loaning schools $250,000 for school projects

Four months after deciding to loan the Kaplan softball program $250,000 to build a new indoor hitting facility, the Vermilion Parish School Board is thinking about putting the brakes on loaning schools and clubs big bucks.
At Thursday’s school board meeting, Erath school board member Chris Hebert is expected to ask the school board to loan Erath High around $150,000 for new baseball locker rooms and covers to be built over the bleachers at the baseball stadium.
If approved, that would mean the school board has approved $650,000 of loans to three high schools over two years.
Last year the school board loaned North Vermilion High School $250,000 for new lights on the baseball field.
Then, in July, the school board voted to loan Kaplan High School $250,000 to build a softball indoor hitting facility. The softball program would pay down the loan over 25 years.
Before that, prior school boards loaned money to the Abbeville High and Erath High booster clubs, who took out loans to add an extra lane or two for the school’s new all-weather track. The booster clubs agreed to pay off the loans over a long period.
The school board eventually had to erase the loan of the booster clubs because they were having financial trouble making the monthly note.
School Board member Kibbie Pillette said he hopes that one day, athletic programs will not have to borrow money to get what they want. Instead, he hopes the school board pays for the projects, not the baseball, softball or band programs.
“There are things that are needed, and I feel that is the school board’s responsibility and not the programs,” Pillette said. “There was a time when programs would not have to borrow money. Instead, the board would pay it.”
School Board member David Dupuis said he only remembers once the school board rejected an organization for borrowing money from the school district.
School Superintendent Tommy Byler told the board he is OK with clubs and programs borrowing money only if they can pay them back “In a timely fashion.”
The school board heard from the school district’s financial officer Eric Johnson. Johnson informed the school board members that the school district is losing money each time it loans schools money.
Johnson told the board members he did not see a problem with loaning money to school clubs or schools. However, he sees a problem when the school board approves a loan for capital projects like building something for $250,000.
“Big loans. That is our issue. We have issued two big loans so far. And we have another coming this week,” said Johnson. “When that first loan occurred, the interest rate we made with our money in the bank was less than one percent. Today, it is 4 1/2 percent. So we are dipping into our revenue for the loans and not earning money in the bank.”
He gave the example that if five high schools borrow a total of $1.5 million and take 20 years to pay it back, the school system will lose $60,000 of interest a year that it could have made with the $1.5 million invested.
“My recommendation is to cut out big loans,” said Johnson.
Pillette said capital outlay loans to athletic programs and clubs should never happen. Instead, he told the school board would budget its money, and if it can afford to pay for new lights at a baseball stadium, the school board will pay for the lights.
“We budget as we have money. The school should not be responsible for a $250,000 loan,” Pillette added.
Pillette said the school board should devise a policy to only loan schools $20,000 instead of $250,000.
“We don’t loan for capital outlay,” said Pillette.