The Wright City R-II School Board approved a second refunding bond resolution for the year, authorizing the sale of $5,250,000 general obligation refunding bonds that will reduce the district’s …
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The Wright City R-II School Board approved a second refunding bond resolution for the year, authorizing the sale of $5,250,000 general obligation refunding bonds that will reduce the district’s future interest expense by $167,710. The board’s action allows the district to take advantage of lower interest rates at an average of about 2.78 percent, compared to the Series 2006A Refunded Bonds which carry a combined average interest rate of about 3.80 percent. The school district’s underwriter, L.J. Hart and Company of St. Louis, presented the proposal to the board at its Feb. 24 meeting. “With this refunding, the principal due on the refunded bonds in 2014 and 2015 was shifted to 2019 and 2020 to better level the school district’s overall debt service,” said Gina Martin, of L.J. Hart. In January, the board approved a refunding bond resolution authorizing the sale of $3,730,000 general obligation refunding bonds. The combined interest savings from that Series 2011A and the $5,250,000 Series 2011B is about $557,615. “These plans allow us to take advantage of the lower interest rates currently available to maximize interest savings to taxpayers and adjust our payments to better facilitate future building programs,” said Superintendent Dr. Chris Gaines, who also noted that the collective refundings presented over the past decade and a half have resulted in total savings of $1,642,366 from what originally was in place. Board President Austin Jones noted that the interest savings for each refunding this year is not the entirety of savings the district may realize, since the bonds have a “call” feature in 2014 at no penalty. “If interest rates are lower in 2014 or later, we can take advantage of that situation to save more,” said Jones. “Meanwhile we’re locking in these lower rates of interest on both refunding bonds.” Both Series 2011A and 2011B were underwritten by L.J. Hart. First State Community Bank purchased $200,000 of the Series 2011B Bonds and The Missouri Bank acquired $455,000 of the Series 2011B Bonds. Closing for the Series 2011B Bonds was scheduled to be completed March 8.
