LTFM Bond Financing and Refunding of the 2014A Bond Debt

In FY 21, the district has $850,000 of existing debt service expiring. This will allow the district to increase its current LTFM levy by the same amount, resulting in no total tax impact on local properties.  This additional LTFM revenue will then be used to pay off the debt that will be incurred when the district sells bonds to raise a maximum of $23.5 million for Indoor Air Quality and HVAC needs.  These needs were identified in district schools during the district's on-going facility study and planning work.  The plan to use this additional LTFM revenue was part of the annual LTFM plan presented and approved by the school board at the July 13, 2020 meeting.    
 

Another opportunity exists for refunding existing debt to save local taxpayers millions of dollars.  Almost all of the district's debt has been refinanced in recent years to secure lower interest rates which results in tax savings for property owners.  However, the 2014A bonds ($69.5 million, which built PWMS, among other projects) have not yet been refinanced. With interest rates at historic lows, the district now has the opportunity to refund these bonds and save local taxpayers at least $3.0 million over the term of the payment schedule.  Current interest rate on this existing debt is 4.0 percent.  As of Monday, rates were under 2.0 percent. 
 

While the two processes of the LTFM bonds and the 2014A refunding are different and separate, the district can proceed with them together to maximize the efficiencies on the sale of the bonds.

The administration recommends that the School Board approve the attached resolution authorizing the Superintendent/Director of Business Services and Board Officer to execute a Bond Purchase Agreement.  The bond sale will occur in mid to late September, 2020.