Results of bond sale for school projects good
Results of a bond sale that will fund the construction projects currently underway in the Warren County School District, as well as part of a renovation at Warren Area High School, went well, according to a financial analyst who oversaw the auction.
Jamie Doyle, a director with Public Financial Management, provided a synopsis of the Dec. 3 sale to the Finance Committee of the school board on Monday.
Doyle said the bonds were sold via “a competitive internet auction” and that she was “very pleased” with the result.”
She cited a recent credit rating change from Moody that removed the negative outlook on the district’s financial condition and assigned a “stable” designation. “Moody recognizes the diligent hard work you are doing at the district… (It is) no small accomplishment in these troubling times.”
According to Doyle, this change “very much helped” the positive result of the bond sale.
The interest rate from the winning firm, BNY Mellon Capital Markets, came in at 4.13 percent which “far exceeded my expectations,” said Doyle, noting that the firm did not bid with insurance, saving the district at least $35,000 off the top.
The total issue amount for the bond sale was $9,980,000 according to documentation prepared for the meeting. At a November meeting, Director of Buildings and Grounds Dr. Norbert Kennerknecht proposed a bond sale in the amount of $4,245,000 to fund the projects currently underway in their entirety.
But as the district started to look at a renovation at WAHS, extending the bond amount to $9,980,000 provides funding for a portion of that project. Federal law states that the district is limited to issuing no more than $10 million in bonds per year. That is the reason this sale will not close until Jan. 9.
Total interest for the bonds amounts to $6,818,052.25 with a “proposed local effort” totaling $15,292,256.37.
Documentation provided for the meeting included a “summary of outstanding indebtedness” form the district that lists the total “local effort requirements” at $61,084,752. Principal, as of Dec. 3, 2013, stands at $71,300,000, according to the report.