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Holmen School District hears update on $74.75 million referendum financing; sale set for Jan. 27
Summary
District finance staff and PMA presented a plan for the remaining $24.75 million of the November 2022 capital referendum debt, recommending a 20-year amortization and a competitive sale on Jan. 27; presenters said the structure aims to smooth near-term levy requirements and could reduce total interest expense.
Holmen School District finance staff on Jan. 13 presented an update on the capital referendum financing for the $74.75 million approved in November 2022, explaining a plan for the remaining $24.75 million and a competitive bond sale scheduled for the morning of Jan. 27.
Eric Kos, director of public finance with PMA, joined virtually and described the district's three-part issuance strategy: a short-term taxable issuance issued in early 2023, a $35 million tax-exempt issuance amortized over 20 years, and the recommended final $24.75 million issuance amortized over 20 years. Kos said the district projects an all-in interest rate of about 4.05 percent for the remaining sale and expects the board to consider a final resolution on Jan. 27 that would set the rates and structure.
Kos said the earlier short-term, taxable issuance was structured to be amortized quickly to preserve flexibility and arbitrage opportunities while the larger tax-exempt piece addressed initial cash-flow needs. He told the board the recommended structure for the last issuance is intended to provide near-term tax relief by lowering the required levy tied to debt service and to preserve optionality for early repayment by future boards. Kos also said the financing strategy would reduce the district’s projected total interest expense relative to pre-referendum estimates; he quantified that reduction at about $10.7 million, subject to final rates on Jan. 27.
Julie Holman, the district’s executive director of finance and operations, joined the presentation and participated in discussion of timing and cash-flow considerations. Presenters emphasized cash-flow timing for projects, the current interest-rate environment and the need to coordinate the final issuance with the district’s levy planning. Kos said staff prioritized avoiding a sale while rates were rising and maximizing flexibility for project closeout and levy smoothing.
No formal action on the financing was taken at the Jan. 13 meeting; Kos said the district would run a competitive sale Jan. 27 and bring a resolution to the board that evening for approval.
A plan summary and final numbers will be presented to the board after the sale is priced and the district locks interest rates.
