Cameron School District approves bond refunding, savings of $1,922,704

The Cameron Board of Education voted to approve a refunding bond resolution during their regular meeting on Monday, October 17.

It authorized the sale of $9,455,000 General Obligation Refunding Bonds at an average interest rate of 1.97%, compared to the refunded portion of the Series 2014 bonds, which carry an average interest rate of 4.17%.  

The District reduces the future interest expense by $1,922,704, and shortens the final maturity of the bonds by two full years.  The total interest savings is $77,246, more than was originally projected on August 22, 2016.  

With this refunding, the total interest savings of the district increased to $3,387,161 since 2004.  Cameron School District Superintendent, Dr. Matt Robinson, expressed enthusiasm and support for the refunding option selected by the BOE. “We can take advantage of the lower interest rates in the market and keep our total payments about the same,” remarked Robinson.

Sarah A. Buczkiewicz, Assistant Vice President of L.J. Hart & Company, mentioned the bonds were to be reoffered to local institutional investors as part of the marketing procedure.  Board President, Mary Tyrrell, pointed out that $1,922,704 of interest savings for the Series 2016 refunding is not all the district may realize due to the Series 2016 refunding bonds having a call feature on March 1, 2021 at no penalty. “If interest rates are lower in 2021 or later, we can take advantage of that. Meanwhile, we are reducing the average interest rate by about two percent,” stated Tyrrell.  

L.J. Hart & Company of St. Louis, Missouri prepared the refunding proposal, and Buczkiewicz mentioned three significant factors making the Series 2016 refunding possible. Lower interest rates, the fact that the $9,400,000 portion of the Series 2014 bonds are subject to prepayment of March 1, 2019 at no penalty, and the district’s ability to participate in the state of Missouri’s direct deposit program. The program makes it possible for the district to receive “AA+” rating from the S&P on the refunding bonds.  

Buczkiewicz complimented Superintendent Robinson for his prompt and thorough preparations to supply the data necessary for the rating application and official statement, as well as the BOE for their foresight in making the Series 2014 bonds callable in five years.

The proceeds from the Series 2016 refunding bonds will be placed in an escrow account with UMB Bank, and reinvested in U.S. Treasury Securities.  The earnings from the escrow account meet the interest payments on the Series 2016 refunding bonds through March 1, 2019, and prepay the callable Series 2014 bonds on March 1, 2019.  

The Series 2016 refunding bonds were underwritten by L.J. Hart & Company, and the legal documents were prepared by Lori Lea Shelley, of Mickes O’Toole LLC, in its role as bond counsel for the district.  

The closing for the Series 2016 refunding bond issue is to occur on October 31, 2016.  Several board members commended L.J. Hart & Company and Dr. Robinson for developing the attractive refunding plan. “It is nice to be able to save $1,922,704 of our taxpayers’ money with this refunding, and increase our total savings since 2004 to about $3,387,161,” commented board member, Dr. Doug Wyckoff.