Miller School District approves general obligation bond refunding to allow savings

The Board of Education of the Miller R-II School District established a final terms committee at a regular meeting on September 19, 2019 that approved the sale of $3,075,000 General Obligation Refunding Bonds to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis, Missouri.
Subsequently on September 30, 2019, the Final Terms Committee authorized the sale of $3,075,000 with reoffering yields ranging from 1.30% to 2.20% compared to 2.20% to 3.125% for the Series 2012 Bonds. The District reduces the future interest expense by about $141,505. This $141,505 plus the approximate savings of $1,507,146 from the previous refundings means the District has saved $1,648,651 of interest expense since 1995. The Superintendent of Schools, Dr. Dustin Storm, 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 if more building improvements are needed,” Dr. Storm remarked.
The refunding bonds were reoffered to local financial institutions and individuals. Board President, Barbara Wagner, pointed out that the $141,505 of interest savings for the Series 2019 refunding, which is an improvement of $12,331 from the September 19, 2019 projections, is not all the District may realize due to the Series 2019 Refunding Bonds having a call feature in March 1, 2025 at no penalty.
“If interest rates are lower in 2025 or later, we can take advantage of that. Meanwhile we are locking in these levels that are almost one percent (1.00%) lower than they were in 2012,” stated Ms. Wagner.
Neil A. Branham, Senior Financial Analyst of L. J. Hart & Company of St. Louis, Missouri prepared the refunding proposal and explained how it can fit into the long range plans of the District. He mentioned that the three significant factors making the Series 2019 refunding possible were the lower interest rates than in 2012, the fact that the Series 2012 Bonds are subject to prepayment on or after March 1, 2017 at no penalty, 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 Standard & Poor’s Global on the refunding bonds. Mr. Branham complimented Dr. Storm for his prompt and thorough preparations to supply the data necessary for the rating application and official statement, as well as the Board of Education for their foresight in making the Series 2012 Bonds callable in five years.
The closing for the Series 2019 Refunding Bond issue is to occur on October 17, 2019. Several board members commended Dr. Storm and L.J. Hart & Company for developing the attractive refunding plan. “It is nice to be able to save $141,505 of our taxpayers’ money and boost our total savings to $1,648,651 since 1995,” commented Cindy Gulick, Vice President of the Board of Education. (information submitted by Miller Superintendent Dr. Dustin Storm).


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