Refunding Bond Sale will Save BHM Schools Over $5 Million
On Thursday, February 23, 2012, Ehlers, the district's financial advisor, took bids for the sale of general obligation refunding bonds for BHM Schools. The bonds will refund 2014-24 maturities of the $42.4 million General Obligation School Building Bonds, Series 2003B, dated November 1, 2003; and the 2014-18 maturities of the $9.1 million General Obligation Alternative Facilities Bonds, Series 2005A, dated December 1, 2005. The first bond issue was for the construction of Northwinds Elementary School (2003). The second bond issue was for alternative facilities projects completed at Tatanka, Hanover, Discovery, and Montrose elementary schools (2005).
Gary Olsen, from Ehlers, presented the bids to the school board at their Monday, February 27 meeting. Olsen began by saying the district has an excellent credit rating. He shared that they hoped to receive the typical three to four bids, but they actually received nine bids on the sale, with the low bid coming from Mesirow Financial of New York, NY.
The school board had previously approved a minimum sales parameter of $3 million, total net present value savings. While Olsen shared that the district could have waited until this coming fall for the sale, the time to sell was now because of the lower interest rates. He anxiously reported that the district got an incredible deal. The future value savings, the amount that will reduce the actual levy, will average approximately $458,000 per year, for the next eleven years (over $5 million).
Director of Finance and Operations Gary Kawlewski said he was very pleased with the results of the sale. "We will be able to save over $5 million in debt service costs over the next 11 years. We felt very fortunate to be able to hit the market when the refunding rates were at historically low rates. The board established savings parameters for the sale, and we were able to greatly exceed those parameters. This a great opportunity for our school district!"