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Board OKs financing parameters for second phase of referendum projects
Summary
The school board approved resolutions to establish parameters for the sale of general obligation promissory notes tied to referendum projects, moving forward with a plan that includes taxable and tax-exempt components intended to limit IRS arbitrage exposure and retire the debt within 10 years.
The Green Bay Area Public School District Board on Feb. 24 approved resolutions establishing parameters for the sale of general obligation promissory notes tied to the district's November referendum.
The board approved a resolution authorizing the sale of up to $105,000,000 in general obligation promissory notes and up to $136,175,000 in total when combined with taxable notes, and a second resolution authorizing not-to-exceed $42,000,000 of taxable general obligation promissory notes as part of a combined financing plan.
Financial advisor Mike Clark and district staff told the board the plan is intended to reduce the district's risk of paying IRS arbitrage penalties by including a taxable portion that the district expects to retire quickly. Clark said the financing structure allows flexibility at pricing to shift amounts between taxable and tax-exempt issues depending on market conditions.
Clark said the district will pay off certain taxable debt quickly; he noted the district will retire $32,825,000 that previously was taxable on April 1 of this year and expects the next phase to be structured similarly so earnings can be retained and used for debt service or other projects. He said the current plan foresees retiring the new debt in about 10 years.
Both resolutions were approved unanimously with all board members voting in favor.
