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Financial advisors present presale report for $10.75 million deferred-maintenance bond
Summary
The district's financial advisors recommended proceeding with a May bond sale to fund deferred-maintenance projects; the issue will use state credit enhancement and is scheduled to close May 22, with estimated net proceeds and an assumed interest rate near 3.95%.
Ehlers Public Finance Advisors presented a presale report to the Forest Lake Area Schools board on April 3 outlining plans for a $10.75 million bond issue to finance deferred-maintenance projects listed in the district’s 10-year plan.
Jody Lesbach and Chrissy Renberg Eide explained the timetable: a Moody’s rating call and review of the official statement will occur in mid-April, bids will be received on May 1 and the sale is scheduled to close May 22 so construction can begin for summer work. The advisors said the district will participate in the state credit enhancement program, which provides a state-backed guaranty and is projected to carry a strong rating (the state currently rated at Moody’s triple-A; the district’s underlying rating was shown as A3).
The presale schedule shows an estimated reoffering premium and projected investment earnings that together increase funds available for projects. The advisors estimated a likely interest-cost assumption around 3.95% for planning purposes and presented detailed sources-and-uses and long-term levy planning intended to keep district tax rates level or declining while funding facility maintenance projects.
Board members asked market-timing questions. Lesbach said uncertain equity markets often drive demand for municipal bonds and that the proposed schedule aims to match receipts with project spending to avoid paying interest on idle funds. Administration will return to the board at the May meeting with sale results.
