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Board approves sale of up to $145 million in school facility bonds; defeasance plan approved after debate
Summary
The Franklin board voted Feb. 19 to set the sale of up to $145 million in general obligation bonds tied to the November referendum and approved a related defeasance plan and banking relationships. The bond sale will be bid March 19 with a closing expected April 10, per the district's financial advisor.
The Franklin Board of Education on Feb. 19 approved a resolution setting the sale of up to $145,000,000 in general obligation school facility improvement bonds that the board will competitively sell with bids taken March 19 and a planned closing April 10, 2025.
Jeff Seeley, the district’s financial adviser with Ellers, said the issuance implements the November referendum and that the bonds are structured as 20-year debt with payments timed to spread tax impact. Seeley said the district already established a levy intended to limit the first-year tax impact to roughly 0.8 mills on a $100,000 home value and that the district will seek a Moody’s rating and run a national competitive sale. “This bond is going to be paid over a 20 year period,” Seeley told the board.
Motion and vote: Dr. Beier moved to approve the sale resolution; Dr. Khan seconded. The board recorded the motion as passing by voice vote, seven to zero.
The board also approved a related resolution to transfer funds and establish an escrow to defease certain outstanding general obligation bonds. Administrators said the defeasance uses levied funds available for debt and that placing proceeds into an escrow and buying short-term securities (described by staff as state and local government series) will remove those specific maturities from the district’s books and generate interest savings. Staff told the board the defeasance would reduce scheduled debt-service payments by roughly $1 million; the net-present-value calculation presented in staff materials was substantially smaller (about $50,000) because NPV uses discounting.
Motion and vote on defeasance: Dr. Beier moved to approve the defeasance resolution; Mrs. Zipperzke seconded. The board recorded a 6–1 roll-call result; Mrs. Witkowski voted no and the motion carried.
The board also approved adding Ellers Investment Partners, LLC, and Ampersand Inc. to the district’s approved depository list under Wisconsin Statute 120.127 for referendum fund administration. Motion to add the depositories was made by Mrs. Yank, seconded by Mrs. Larson, and passed by voice vote.
Administrators told the board that final bond pricing will be determined on the March 19 sale and that any premium generated by the sale will be capitalized to offset early interest payments. Financial staff said the district expects to present the bid results and an award resolution at the March 19 board meeting.
Votes at a glance (Feb. 19 board meeting) - Resolution setting sale of up to $145,000,000 general obligation bonds (series 2025A): motion by Dr. Beier; second Dr. Khan; outcome: approved, 7–0 (voice). - Resolution authorizing transfer of funds and defeasance of certain bonds: motion by Dr. Beier; second Mrs. Zipperzke; outcome: approved, 6–1 (Mrs. Witkowski opposed). - Addition of Ellers Investment Partners, LLC and Ampersand Inc. to approved depositories (Wis. Stat. 120.127): motion by Mrs. Yank; second Mrs. Larson; outcome: approved (voice vote). - Other routine approvals during the meeting included the consent agenda, scholarship recognitions and several policies; see district minutes for full roll-call where recorded.
The board’s financial adviser said that after the competitive sale and award the district will receive the bond proceeds at closing and may use premium and proceeds consistent with the district’s debt plan and state law.
