Good news in school district finance!
February 29, 2012
Lone Jack, Missouri – The Board of Education of the Lone Jack C-6 School District voted unanimously on February 29, 2012 to issue $3,310,000 of general obligation refunding bonds in order to refinance its Series 2005 and Series 2006 bonds, saving district taxpayers $274,195.27 in total interest over the life of the issue.
By taking advantage of an early call provision and record low rates in the municipal bond market, the District is able to reduce the all-inclusive rate on the bonds from 4.16% to 1.59%, while maintaining the original final payoff dates of the bonds. The process is similar to refinancing a home mortgage: New bonds are issued at the lower interest rate levels, and the proceeds of the new issue are used to pay off the existing bonds. The interest rates were locked in by the approval of the Board of Education today. The effective yields on the refunded bonds ranged from 0.50% to 1.80%. “We were excited to be able to take advantage of a record low market and put the District is such an excellent position going forward,” commented Board President Ron Murkin. “I was part of the Board of Education when these bonds were issued and I am proud that we can improve an already successful project by saving additional interest cost.”
“We are pleased as a board to be able to use the savings from this issue to create an opportunity to address future facilities needs of the District without an increase in our current tax rates,” said Board Vice President David Keener. “By approving the original bond issues in 1999 and 2006, voters placed their trust in us. I believe we are validating that trust by approving this refunding which ultimately saves the district and voters money.”
The bonds carry a “AA+” rating from Standard & Poor’s Corporation as a result of the District’s participation in the Missouri Direct Deposit Program.
The new bonds also have an early call option enabling the district to possibly refund again in 2017 or after if interest rates allow. Refunding the bonds reduces interest expenses by $251,991.92, while allowing the district to maintain the existing debt service fund levy which has been used to support the District’s bonds since Fiscal Year 2005-06. The refunding was structured to allow a portion of the savings to be available in the future to help support a new bond issue if additional facilities improvements are needed.
“The Lone Jack C-6 School District takes pride in being a good steward of the taxpayers’ dollars. It is a responsibility we do not take lightly,” said Superintendent of Schools Dr. Bill Redinger. “We are pleased to live in a community with such strong support for the school district and a history of approving bond issues to provide a top notch education for our students. This refunding illustrates our commitment to safeguarding our investments in our facilities. We know that we will have additional facilities needs in the future, and we believe that the savings from this refinancing will help to position the district to best meet those needs.”
