At a regular meeting of the Schuyler County R-I School District Board of Education on August 17, 2017 a refunding bond resolution was approved that established a final terms committee consisting of Kirk Newland, Board President, Robert Amen, Superintendent of Schools, and Larry J. Hart, President and CEO of L.J. Hart & Company. On August 25, 2017, the final terms committee was able to lock in the interest rates for the $3,000,000 General Obligation Refunding Bonds at an average interest rate of about 2.81%, compared to the Series 2015 Bonds which carry an average interest rate of about 4.76%. The District reduces the future interest expense by about $471,534, which is an increase of $75,669 above the original projections at the August 17, 2017 presentation. Mr. Amen expressed enthusiasm and support for the refunding option selected by the Board of Education. “This plan achieves good savings, and demonstrates the Board of Education’s fiscal responsibility by taking advantage of the lower interest rates,” Mr. Amen remarked.
The Board President, Kirk Newland, pointed out that the $471,534 of interest savings for the Series 2017 refunding is not all the District may realize due to the Series 2017 Refunding Bonds having a call feature on March 1, 2022, at no penalty. “If interest rates are lower in 2022 or later, we can take advantage of that. Meanwhile we are locking in these levels that are almost two percent (1.95%) lower than they were in 2015,” stated Mr. Newland. L. J. Hart & Company of St. Louis, Missouri prepared the refunding proposal and Tom Pisarkiewicz, Vice President and CFO of the firm, explained how it can fit into the long range plans of the District. Mr. Pisarkiewicz mentioned that the three significant factors making the Series 2017 refunding possible were the lower interest rates than in 2015, the fact that the Series 2015 Bonds are subject to prepayment on March 1, 2020, at no penalty, and the District’s ability to participate in the State of Missouri’s Direct Deposit Program. This program makes it possible for the District to receive a “AA+” rating from Standard & Poor’s Corporation on the refunding bonds. Mr. Pisarkiewicz complimented Mr. Amen for his prompt and thorough preparations to supply the data necessary for the rating application and official statement, as well as the Board of Education for their foresight in making the Series 2015 Bonds callable in five years.
The Proceeds from the Series 2017 Refunding Bonds will be placed in an escrow account with UMB Bank, N.A. of Kansas City, Missouri and reinvested in U.S. Treasury Securities. The earnings from this escrow account meet the interest payments on the Series 2017 Refunding Bonds through March 1, 2020, and prepay the callable Series 2015 Bonds on March 1, 2020. The Series 2017 Refunding Bonds were underwritten by L.J. Hart & Company. The Bonds were marketed to local financial institutions with the Bank of Kirksville acquiring $1,040,000 and the Exchange Bank of Northeast purchasing $100,000 of the bonds. This local support was helpful in the success of the financing. The closing for the Series 2017 Refunding Bond issue is to occur on September 28, 2017. Several board members commended Mr. Amen and L.J. Hart & Company for developing the attractive refunding plan. “It is nice to be able to save $471,534 of our taxpayers’ money and boost our total savings on refundings from $654,298 to about $1,125,832 since 2002,” commented Shannon Smith, Vice President of the Board of Education.