THAYER -- At their March 13 Thayer School Board meeting, by unanimous vote, the board voted for a refunding bond resolution.
According to Thayer Superintendent of Schools Rod Priest, the refunding resolution authorized the sale of $2,600,000 General Obligation Refunding Bonds at an average interest rate of about 3.43 percent, compared to the Series 2003 Refunded Bonds which carry an average interest rate of about 4.47 percent.
"The district's action reduces the future interest expense by about $342,904 and shortens the final re-payment period by two full years from the original Series 2003 Bonds without significantly increasing the payments each year," Priest said.
The superintendent expressed enthusiasm and support for the refunding option selected by the school board. "This plan does not substantially change our existing annual debt service payments, and it preserves considerable flexibility for the district to present a no tax increase bond issue to the voters in the future," he said.
School board president, Randy Ward, pointed out that the $342,904 of interest savings for the Series 2008 refunding is not all the district may realize due to the Series 2008 Refunding Bonds having a call feature on March 1, 2013, at no penalty.
"If interest rates are lower in 2013 or later, we can take advantage of that. Meanwhile, we are locking in these levels that are more than 1 percent lower than they were in 2003," Ward stated.
Priest said Heather L. Mudd, vice president of L.J. Hart and Company from St. Louis prepared the refunding proposal and explained how it can fit into the long range plans of the school district.
According to Priest, Mudd said the three significant factors making the series 2008 refunding possible were lower interest rates than in 2003, the fact that the Series 2003 bonds are subject to repayment on April 1, 2008, 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 an AA+ rating from Standard and Poor's Corporation on the refunding of the bonds.
Priest was complimented by Mudd for his prompt and thorough preparations to supply the data necessary for the rating application and official statement, as well as the school board for their foresight in making the Series 2003 Bonds callable in five years.
The Series 2008 Refunding Bonds were purchased from the District by L.J. Hart and Company. Mudd said the Alton Bank acquired $1,365,000 of the bonds and the Bank of Thayer acquired $220,000 of the bonds. The closing for the Series 2008 Refunding Bond issue is to occur on March 25.
Several of the school board members complimented Priest and L.J. Hart and Company for developing the refunding plan. "It is nice to be able to save $342,904 of our taxpayers' money, and the call feature allows us to prepay bonds at a later date which can again shorten the term," said Bill Franz -- vice president of the school board.