The Little Falls School Board approved authorization to sign for refunding bonds, to possibly save $63,000 over five years.
The bonds were issued in 2009 and used for updates to buildings in the Little Falls School District, mostly at Lincoln Elementary, the middle school and Dr. S.G. Knight in Randall.
The refunding would be for the five-year period of 2019 to 2024, since 2019 is the earliest call date for the debt service fund.
Steve Pumper of PMA Securities Inc. told the Board Monday, a savings of just over $63,000 could be realized in that time period, if the interest rates the company expects, between 1.25 and 1.95 percent are realized. The bonds are currently at a 3.5 to 4 percent interest rate.
Pumper said the refunding would only take place as long as it meets state statute, requiring the true interest cost not exceed 2.5 percent and a refunding debt savings of at least 3 percent.
He said if the district didn’t save at least $47,000, “We won’t do that on behalf of your district,” Pumper said. “If the market doesn’t allow for that, we’ll say come back.”
The resolution approved Monday, authorizes Supt. Stephen Jones, Business Manager Nancy Henderson and one Board officer to sign to award the sale of the bonds for the refunding, should PMA Securities determine the timing was right in the market to do so. This ensures not missing a deal because it was not timed near a meeting date for full Board approval.
“We will pick a day that makes sense instead of matching it up with a Board meeting,” Pumper said. “We can look at market and say this is a better day for a sale, even though it doesn’t line up with Board meeting.”
Pumper explained refunding in layman’s terms as taking an outstanding debt and refinancing it to get a lower interest rate, similar to refinancing a home.
The savings will not affect taxpayers, however, Pumper said.
The savings would be used to pay down the district’s debt service.
“The savings will help the capital budget,” Pumper said.
Should the sale of the bonds be awarded, Pumper would come before the Board for final certification.
Pumper said the bonds may be rated in October, to see whether the savings is enough. Nov. 2 is a tentative date to sell the bonds, Pumper said.
If the bonds are sold prior to Nov. 20, Pumper will attend the Nov. 20 School Board meeting to have the Board certify the final resolution.
“If all that happens, the bonds will close Nov. 30,” Pumper said, although those dates could be pushed out further.
Pumper called this action an advanced refunding, because the refunding wouldn’t start until 2019.
“The reason we want to take action earlier, is because rates are favorable to do this now,” Pumper said.
Little Falls School Board Briefs
At Monday’s meeting, the Little Falls School Board:
- Approved the extended field trip to Costa Rica scheduled for March 31 – April 18, 2018;
- Approved the employment of Cynthia Behsman as Early Childhood Family Education (ECFE) teacher/paraprofessional; Sheila Funk and Mike Kaluza as co-Student Council advisers; Sara Hennen, Mary Pfeffer-Friese and Sheila VanDenheuvel as transportation aides; Lisa Houdek as ECFE paraprofessional; Laurie Larsen as 10th grade softball coach; and Wendy Petrich as ECFE teacher;
- Accepted the resignations of Darrel Cronquist as custodian at Lindbergh Elementary; Cara Herold as school health paraprofessional; Stephanie Hurt as a personal care attendant (PCA) and educational paraprofessional (EP) at the Middle School and Greg Jamison as assistant track and field coach;
- Approved the maximum levy at 4.65 percent, on the recommendation of Business Manager Nancy Henderson, as the amount can be reduced, but not increased. Henderson said the district is still unsure of what the state will do, and approving the maximum will give the district some leeway depending upon what the state does with funding;
- Accepted gifts from the following: Lisa Segler – $3,445, Joanne Larson – $50 and anonymous – $100, all to the Abigail Segler Fine Arts Memorial Scholarship; Carrie and Stephan Staniulis – $100, Catherine and David Adamek – $100 and an anonymous $100 for the “Take A Seat” program to fund seats in the auditorium; Little Falls Dandee Lions – $250, Donna and James Hegstrom – $50 and Morrison County United Way Inc. – $1,000, to the Flyer Pride Pack Weekend Food Backpack Program; and $5,000 each from Gangelhoff Properties Inc. (Country Inn and Suites), Pine Country Bank, Brandl Motors and CHI St. Gabriel’s Health, per the scoreboard agreement; and
- Approved allowing Swanville students who desire to wrestle, to join the Flyers wrestling teams, at the middle school and high school levels, as needed. Activities Director Kevin Jordan said they would wrestle under the Flyers’ name. Board Member Brad Laager said he supported helping out neighboring districts with activities needed by students, as Brainerd had helped Little Falls by allowing several students who wanted to play hockey join their program.
The School Board’s next meeting is at 5 p.m. Monday, Oct. 16, in the media center at the Little Falls Community Middle School.