Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Debt Defeasance Finance topic
No spam. Unsubscribe anytime.
BASD moves $5.065 million into escrow to defease 2019 refunding bonds, board approves resolution
Summary
The board authorized establishing an escrow account and transferring $5,065,000 to defease outstanding general obligation refunding bonds originally dated April 1, 2019, a move the district said will remove debt from its books and save about $2.01 million.
The Burlington Area School District board on May 12 approved a resolution to transfer $5,065,000 into an escrow account and defease outstanding general obligation refunding bonds dated April 1, 2019.
Ruth (Business Services) told the board the levy for the current year included an extra $5,065,000 designated for debt defeasance; those funds were collected through taxes in January and February. She said the transfer will pay off the remaining balance on the district’s 2020 and 2019 balances and that the action will reduce five years from the district’s repayment schedule and save roughly $2,010,000, an “about 40% rate of return.” She explained the escrowed money will be held by an associated trust until the bonds become callable in 2027, after which the defeasance will be final.
Ruth told the board the debt relates to the district’s 2018 capital referendum (the Karcher Middle School construction was cited as the primary project funded by that referendum). The resolution authorizes the transfer and delegates signature authority to district business staff to complete the required closing documents.
The motion passed on a roll call vote with board members recorded as approving: Kate, Hussain, Taylor, Madeline, Peter, Noah and Rebel.
Jill (Superintendent) and Ruth reminded the board that this action implements a levy decision the board made in the fall and is not a new levy request for next year.
