The Warren County R-III School Board last week approved a bond refunding resolution that takes advantage of lower interest rates in the current economy to save the district more than a $1 million in …
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The Warren County R-III School Board last week approved a bond refunding resolution that takes advantage of lower interest rates in the current economy to save the district more than a $1 million in interest expenses for its Series 2006 and 2009 bonds. During its Dec. 9 meeting, the board unanimously approved the sale of $8,865,000 in general obligation refunding bonds at an average interest rate of about 2.27 percent compared to an earlier combined rate of 4.21 percent for both bond series. The rates apply to Series 2006 bonds maturing from March 1, 2013, through March 1, 2020, and all of the Series 2009 bonds. The school district’s financial advisers, L.J. Hart and Company of St. Louis, presented the proposal, which was approved 5-0. Board members Bill Hawley and Beth Banze were absent. “These savings give the school district a lot of flexibility in the future to present building proposals without increasing the debt levy,” said Tom Pisarkiewicz, vice president of L.J. Hart, in outlining the refunding proposal to the board. He noted that The Missouri Bank purchased $500,000 of the refunding bonds to support the school district, and that this action had been important to the success of the financing. Pisarkiewicz told the board that the $1,023,020 in interest savings for the Series 2010A refunding brings the total interest savings from refundings and prepayments to nearly $4.3 million over the past 15 years. If interest rates are lower in 2014 or later, the district may take advantage of further savings without penalty, he said. In addition to lower interest rates compared to 2006 and 2009, another significant factor in the refunding is that the bonds are subject to prepayment on March 1, 2011, at no penalty. The district is able to participate in the state’s direct deposit program, helping R-III receive a AA+ rating on the refunding bonds from rating agency Standard & Poors. “It’s great to be able to save taxpayers’ money,” said Board Vice President Dale Schowe. Closing for the Series 2010A refunding bond issue will be Dec. 21.
