Heights B.O.E. to refinance bonds

Refinancing bonds issued nearly a decade ago for construction of the middle and high school classroom addition at Jackson Heights, as well as energy system upgrades for the district, will result in nearly $350,000 in savings for the district, the USD 335 Board of Education was told on Monday.

During their regular monthly meeting, board members approved an agreement with Farmers Bank and Trust of Great Bend for the refunding of $1.56 million in series 2008 certificates of participation on the school’s energy lease, as well as an agreement with Texas Capital Bank of Dallas for the refunding of $2.25 million in series 2007 bonds used in building the classroom addition.

The board met with Roger Edgar, executive vice president of the George K. Baum and Company investment firm of Kansas City, Mo., who said he could get the interest rate on the 2007 bonds cut from 4.09 percent to approximately 2.4 percent and the interest rate on the 2008 certificates of participation (COPs), issued to cover the costs of the energy system upgrade, cut from 4.28 percent to 1.99 percent.

Edgar said the gross reduction in debt payments with the new interest rates would amount to $334,986 on the COPs and $206,362 on the 2007 bonds, totaling $541,348. With the cash contributions on unspent bond monies at $100,000 on the COPs and $94,000 on the 2007 bonds, the net amount saved would be $347,348, he said.

The average annual total savings for the district, Edgar said, would be $32,348 with the new, lower interest rates applied. That amount did not include the $1,500 per year the district will be saving in agent fees no longer needed, board members noted, because the district would be paying the two banks directly.

Board members unanimously approved Edgar’s proposal, noting that in addition to the savings proposed, the district would also make its final payments on both the bonds and the COPs a year early.

“Saving all that money, having a year less to pay and not having that $1,500 in fees — the reasons to do it are all right there,” board member Melinda Wareham said. “This looks good to me.”

In November of 2007, district patrons voted to approve the $3 million bond issue that would be used to build the JHHS addition. However, the board’s joy over the vote was offset by an increase in proposed costs for an upgrade to the district’s mechanical system, prompting the issuance of $2.9 million in COPs to pay for system upgrades.

At present, $2.25 million remains on the 2007 bond issue, and $1.56 million remains on the COPs, the board noted. Those amounts included the unspent cash contributions of $194,000, which Edgar had previously advised the board to use to reduce the total indebtedness on the bond issue and the COPs to put “less pressure on the mill levy” for district taxpayers.

Issuance of the new bonds and COPs also included a total of $75,038 in “issuance costs” that will be divided among those involved with the refinancing bond issue, it was reported.

The Great Bend bank had offered the best interest rate on the COPs but said that having to refinance both the COPs and the bonds would be “too much for them,” Edgar said. He also noted that local banks had been contacted about the refinancing issue and, again, said it was “too much” for them to handle.

The board noted that a special meeting would be necessary prior to its next regular meeting — set for Monday, Nov. 14 — in order to secure the intererst rate on the new bonds and COPs.

In other business on Monday, the board:

* Approved the meeting’s agenda and consent agenda, the latter including minutes from the board’s Sept. 12 meeting, monthly bills and activity account reports and acceptance of a $1,000 grant from the Prairie Band Potawatomi Nation that District Superintendent and Elementary Principal Adrianne Walsh said would help cover the costs of FOSS science curriculum materials at the elementary school.

* Approved, on a 6-1 vote, a proposal from Custom Sheetmetal and Roofing of Topeka to install new HVAC equipment at the elementary school at a cost of $15,980. Board member Kelly Kennedy voted in opposition to the work.

* Approved an updated list of goals and priorities for the 2016-17 school year.

* Scheduled a public forum for 8 p.m. Thursday, Oct. 20, for discussion of a proposal to start a high school baseball and softball program in the district.

* Approved a motion from Neal Keeler to call Parallel Farms, Jackson Farmers and Knotty Pine Oil “every other Monday” for low fuel bids on a 4-3 vote, with Kennedy, David Allen and Ed Rostetter voting against the motion.

* Received information from Walsh on a “zero year guidance plan” from the Kansas State Department of Education’s Kansas Education School Accreditation program.

* Received information from Walsh on a suicide prevention program for the district.

* Received information from Walsh on a memorandum of understanding between the school district and area law enforcement agencies.

* Heard a report from Walsh on elementary school activities, including the Lego curriculum, Down syndrome awareness and upcoming school events.

* Heard a report from Middle and High School Principal Darren Shupe on activities at the middle and high school.

* Met in executive session for 25 minutes with Walsh to discuss non-elected personnel matters.

* Accepted the resignation of Jessica Bachamp as a part-time district cook.

* Approved the hiring of Robert Rye as district food service manager.

* Adjourned the meeting at approximately 10:30 p.m.