School board approves $8.98 million certificates of participation to fund transition program remodel

Katie Schwartz, chair of the South Washington County Schools Board, on Jan. 16 approved the sale of Certificates of Participation (Series 2025A) authorizing the district to finance the acquisition and remodeling of a building for the Special Education Transition Program.

The action ratified the award of sale after a presentation from the district—s financial adviser and the sale report. The district will issue $8,980,000 in certificates, below the board—s previously authorized cap of $9,445,000, and will deposit $9,192,495 to the construction fund. The district—s consultant reported a true interest cost of about 4.03 percent and said the sale produced lower principal-and-interest payments than earlier estimates.

Why it matters: The financing provides funds to complete acquisition and remodeling work for the Special Education Transition Program and locks in market terms the district said reduce future debt service compared with earlier estimates.

Board members were told Moody—s affirmed the district—s underlying A1 rating and assigned the issue an A2 rating. The district received five bids; the low bidder was KeyBank Capital Markets at a roughly 4.03 percent rate. District staff said the deposit to the construction fund matches the project cost estimates provided by the district—s contractor consultant, and that call provisions will be monitored for future refunding opportunities to reduce taxpayer debt service.

Details provided at the meeting include: - Issuance amount: $8,980,000 (board had authorized up to $9,445,000). - Estimated construction deposit: $9,192,495; contractor estimates of project costs quoted at $9,190,000. - True interest cost reported: approximately 4.03 percent (below the prior estimate of 4.33 percent). - Bidders: KeyBank Capital Markets (low bidder), FHN Financial Capital Markets; Baird; Hilltop Securities; Northland Securities (highest bid). - Credit: Moody—s affirmed an A1 underlying rating for the district and assigned an A2 rating to the certificates; the rating agency—s scorecard result was noted as within the AA category on the district—s scorecard.

The board approved a resolution ratifying the sale by voice and roll call. Chair Katie Schwartz called for a roll call vote on the resolution; board members who responded at the roll call indicated approval.

The board—s presentation noted the district will continue to monitor refunding opportunities on the certificates, and that any savings from future refundings must be passed through in lower debt service to taxpayers per the district—s debt procedures. The resolution ratifying the award concluded the agenda item.

The item was presented by the district—s Director of Business Services and the district—s financial adviser, who reviewed the sale-day report and attachments that included bid tabs, updated sources-and-uses schedules, Moody—s rating reports and the detailed credit opinion.