School Board considers refinancing 2009 bonds to save taxpayers money

The 2009 School Building and Site Bonds have a window opening for a chance to refinance the bonds, which could lower interest costs and thereby reduce what the taxpayers have to come up with to pay off the bonds.
At Monday’s regular meeting of the Van Buren Public Schools Board of Education, Jesse Nelson of H.J. Umbaugh & Associates, CPAs, explained the proposed refinancing to the board.
He said the bonds were sold through the federal government’s Build America Reinvestment program, where the government offered money. He said now the district pays from 3.61% to 4.42% interest on the bonds and interest any less than that would save money for the community.
He said there is estimated to be $7.8 million in total savings and with the plan to buy the bonds down by $2.3 million, leaves a net savings of $5.5 million.
He said the transaction would put $63 million in escrow to pay off the old bonds and estimated $61 million in new bonds.
“These are conservative numbers,” Nelson said.
The district currently levies 2.98 mills to pay back the 2009 bond loan payments. The bonds are in a separate account and have nothing to do with the general fund.
Monday’s discussion was the second step in the process, after starting with a board finance committee meeting. After the board discussion, the board is being asked to pass a resolution at its Nov. 12 meeting to authorize the project to move forward.
Nelson said the actual bond rate will be available on Jan. 28 when the lowest bid/best deal will be determined. The money from the new refunding bond would be received Feb. 19 and then they pay off the old bonds and get the new bonds.
The attorney who wrote the resolution the board will consider passing at the Nov. 12 meeting said this doesn’t obligate the board to move forward if the numbers aren’t good.
Board treasurer Susan Featheringill stressed that if the interest rates are too high, “We’ll stop.”
Nelson said each year the new debt is calculated and the earliest taxpayers would see a reduction in payment would be the summer of 2019.
Also at Monday’s meeting, the board:
• Approved the retirement of George Buhro, a teacher at Belleville High School, as of Nov. 23 after 25 years of service;
• Approved the employment of Shannon Farnell as a Kindergarten teacher at Tyler Elementary School as of Oct. 9; and the employment of Kelli Robinson as a guidance counselor at BHS as of Oct. 29;
• Approved the resignation of Julie Eaton as a non-instruction staff member at Edgemont Elementary School as of Oct. 28 after two years of service for personal reasons; and the employment of Erin Mastrogiacomo as a secretary at Rawsonville Elementary School as of Oct. 15;
• Approved the Nov. 12-16 trip for 225 sixth graders from Owen Intermediate School to Camp Copneconic in Fenton. Cost to students is $225 each, financed by student families and fundraisers;
• Was informed the following teachers have received tenure status: Fatima Thompson, Jillian Leaym, Stacy English, Jaime Elgas, Amy Morning, Margaret Yurcak, and Julie Dobek;
• Heard presentations from McBride Middle School, Tyler Elementary, and Haggerty School, with officials from each building presenting to the board one of their school improvement initiatives that they are working on this year;
• Heard Curriculum Director Jeff Moore present an analysis of the impact of intervention on student achievement;
• Approved contracting for quarterly newsletter publishing, printing, and mailing with Johnston Lithograph for $5,973 per quarter, with board president Keith Johnston abstaining from the vote on the contract with the company he co-owns with his brother Kevin. Finance Director Shareen Barker said there were requests for bids sent to 67 vendors and six bids came back, with the one coming in past deadline not considered. Board president Johnson said he was never a part of the process, with Barker agreeing that his brother Kevin was the contact person;
• Heard School Supt. Kudlak say people in the Transportation Office were driving buses earlier that day because there were not enough bus drivers available;
• Heard Supt. Kudlak say the district will be putting up a Tiger Wall before winter to commemorate school athletes who had passed on. He said two of the benches acquired by Girl Scout Marina Gerick through her plastic cap collections will be put at the Wall; and
• After a closed-door session before the regular meeting, turned down the appeal for a special-education student who had been expelled.