Refunded bonds to save taxpayers $9.5 million

On Monday, Jan. 28, the Van Buren Public Schools completed the bond sale for the 2019 Refunding Bonds being issued to refinance most of the building and site bonds issued in 2009 for the new high school.
Eight bids were received for the $63 million in bonds and UBS Financial Services was the winner with a 20-year True Interest Cost of 3.145193%. As a result, total net gross debt service savings received were $9,480,265.
This equates to a present value debt service savings of $6,245,104.
Matthew F. Hiser, the district’s finance attorney from Thrun Law Firm, was present at Monday’s regular meeting of the board of education to explain the sale and to get immediate approval so he could send on the qualification application signed by school officials. He said he had to report the exact time of the approval, which was 7:15 p.m.
“We have very good news,” Hiser said. “You’ll be glad you had this meeting tonight,” referring to the cold, snowy conditions that closed the school district for the day.
“The community should be grateful because this will bring them a lower millage rate,” Hiser said.
He said the sale of refunding bonds was estimated to save the district $2.7 million, but it was $6.2 million.
“We estimated 4.42% savings and final savings was 10.1%”
In a press release on the 2019 refunding bonds, it was stated that as a part of the 2019 Bond sale process, the district’s bond rating was reviewed.
“Good news was received as the district secured the strong bond rating of ‘A’ stable,” the release stated. “The 2019 Bonds also received a ‘AA’ rating for participation in the School Bond Qualification and Loan Program.”
The release closes with: “The Board of Education and Administration are pleased with the debt service savings received and happy to share this information with the community.”
The next step was to have the Draft Final Official Statement distributed on Jan. 29, have it printed on Feb. 4, receive final qualification from the Treasury Department on Feb. 15, and close on the bonds on Feb. 19.
Hiser said Huntington National Bank will be the escrow agent for the funds, which will be invested in federal securities until used.
The prior bonds that were refunded totaled $97.8 million, and $3.4 million of the 2009 bonds were non-refunded.
The financial discussion on the bonds was led by School Supt. Pete Kudlak in the unexplained absence of Financial Director Shareen Barker.
In other business at the Jan. 28 meeting, the school board:
• Approved the budget amendments for the 2018-19 fiscal year based on actual staffing and expenses so far, submitted by Barker and presented by Kudlak. There was an increase in revenue in the original budget from $52.0 million to $53.21 million. There was a decrease in expenditures from the original $54.7 million to $54.4 million, for a total of $1,268,794 of revenue under expenditures. This leaves an unassigned fund balance of $4.4 million;
• Approved the recommended updates to board operating procedures that were reviewed in detail at the last meeting;
• Approved the terminations of teachers Jessica Argiero of Belleville High School after less than a year of service as of Feb. 22 because she is relocating; and Carly Guyot of McBride Middle School after less than a year of service as of Feb. 1 for another job opportunity;
• Approved the resignations of two employees of the transportation department, Ryan Hughes after three years of service as of Jan. 14; and Kalyn Walz after 1.5 years of service as of Jan. 22;
• Heard Supt. Kudlak announce that the school district will again be asked to participate in a countywide vote for a school enhancement millage in the November 2020 election;
• Discussed snow days. Supt. Kudlak said the district has 2.5 snow days as of Monday and the state allows 6 snow days. He said Wednesday, Jan. 30, will probably be another snow day because of the extremely low wind-chill temperature expected;
• Heard Director of Instruction Jeff Moore report he heard a presentation at Wayne County Community College earlier that day by a Harvard professor about educational leadership and RESA is offering a pilot project in the Van Buren schools where Edgemont Elementary will take part in “Instructional Rounds.” Participants in the Rounds will observe at Edgemont and also visit other schools;
• Heard Kudlak remind everyone of the second-annual STEAM Showcase from 10 a.m. to noon on Saturday, Feb. 2, at the BHS Commons and Media Center to show off the students’ work in science, technology, engineering, arts, and mathematics. He also said he will be making two presentations at the upcoming superintendents’ conference in Detroit: one on controlling health care costs and one as part of a panel on the educator shortage statewide;
• Heard Human Resources Director Abdul Madyun report he is still negotiating with the teachers’ union and his goal is to get that contract done. He said their contract has expired, but they are making progress and there is no animosity. He said the contract is on a calendar basis, January-December;
• Heard board president Keith Johnston say he attended the Decision-Based Budgeting meeting last week and he was very impressed with the information Supt. Kudlak presented. He said he would like Kudlak to do a State of the School address in the BHS Auditorium after a brief school board meeting in the future; and
• Went into closed-door session at the end of the meeting to discuss potential reinstatement of a student for the remaining of the school year and then came back into open session to reinstate the student.