School board approves tax anticipation notes to finish athletics upgrades

The Amherst Exempted Village School Board approved a resolution authorizing the issuance and sale of tax anticipation notes with an aggregate principal of about $2.5 million to fund general permanent-improvement projects, primarily to finish athletics upgrades.

Board members and finance staff discussed repayment terms and costs before the roll call. A district finance staff member summarized the funding and repayment pledge, saying, “The tax anticipation note is a borrowing instrument. . . . The inside millage movement to permanent improvement is what is being pledged to repay the tax anticipation.”

The resolution as discussed calls for roughly $2,500,000 in principal and an estimated $50,000 in issuance costs; an earlier line in the resolution text referenced $2,550,000 and one speaker read a figure “not to exceed $2,515,000,” which participants clarified during debate. Board members and staff discussed repayment terms: the district originally considered a five-year repayment schedule, bond counsel had proposed language allowing up to nine years (the statutory limit noted during the meeting is 10 years), and staff said the board would limit the actual placement to six years when the notes are issued. The board also heard that a longer term increases total interest costs by about $55,000 for each additional year of repayment, based on schedules prepared by the placing agent and underwriter.

Officials said the district expects to place the notes as a private placement with a single financial institution, which typically reduces issuance costs and can produce a more favorable rate; the underwriter/placing agent named during the discussion was Stifel. Bond counsel Mike Sharf, Esquire, was cited as having prepared language in the draft resolution. Staff also said the district can prepay the principal early without penalty and that principal and biannual interest payments are expected to be paid from the permanent improvement fund once the inside millage is moved to that fund.

After discussion the board took the motion, called the roll and approved the resolution. The board asked that when the district proceeds to place the notes, Stifel and the placing agent not use a term beyond six years, even though the draft resolution contains longer-authority language.

The board did not enact any changes to the resolution text at the meeting; staff said they would ensure the negotiated placement would conform to the board’s direction on term length and that annual conversations about early repayment would be prudent.

Votes at the meeting were taken by roll call and recorded as affirmative responses from the members present.