Kelso C-7 School District approves general obligation bond refunding
NEW HAMBURG, Mo. — The Board of Education of the Kelso C-7 School District approved a resolution at a regular meeting on Nov. 11 that authorized the sale of $2.18 million in General Obligation Refunding Bonds to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis, Missouri. The Series 2020 Refunding Bonds have reoffering yields ranging from 0.65% to 1.20% compared to an average interest rate of 3.95% for the Series 2016 Bonds. The District reduces the future interest expense by about $515,434. It is the result of the extremely strong current municipal bond market that is producing historically low interest rates as well as the good name of the District in the municipal bond credit market, according to L.J. Hart & Co.
Kelso C-7 Superintendent Dr. Kimberly Burger expressed enthusiasm and support for the refunding option selected by the Board of Education.
“This plan achieves significant savings and allows the District to capture better conditions in the municipal bond market for the benefit of our taxpayers. It also preserves considerable flexibility for the District in the future for building improvements with no-tax increase opportunities,” Burger said.
Thomas J. Pisarkiewicz, President and Neil A. Branham, Assistant Vice President of L.J. Hart & Company of St. Louis prepared the refunding proposal and explained how it can fit into the long-range plans of the District. Pisarkiewicz mentioned that the three significant factors making the Series 2020 refunding attractive were the lower interest rates than in 2016, the fact that the Series 2016 Bonds are subject to prepayment at no penalty on March 1, 2021, 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 S&P Global on the refunding bonds.
Pisarkiewicz complimented Dr. Burger for her prompt and thorough preparations to supply the data necessary for the official statement, as well as the Board of Education for their foresight in making the Series 2016 Bonds callable in five years. The Series 2020 Refunding Bonds will also have a five-year call feature of March 1, 2026, at no penalty.
The Series 2020 Refunding Bonds were made available to local financial institutions as part of the marketing procedure. The following local banks agreed to purchase some of the Bonds; Bank of Missouri ($900,000), Bank of Advance ($655,000), Southern Bank ($175,000) and Alliance Bank ($100,000). The closing for the Series 2020 Refunding Bond issue is to occur on Dec. 17.
Burger said she was pleased efforts were made to accommodate local investors.
“It is nice that our marketing procedures facilitated this local involvement while still receiving attractive interest rates,” Burger commented.
Several board members commended Burger and L.J. Hart & Co. for developing the attractive refunding plan.
“It is nice to be able to save $515,434 of our taxpayers’ money by taking advantage of the most favorable conditions in the municipal bond market in over 60 years,” said Elizabeth Glastetter, president of the Board of Education.