School board hears $230M capital plan, considers tax‑anticipation note and potential refunding

Manatee County School Board members on Sept. 16 heard a three‑part finance briefing from the district’s investment adviser (Deep Blue) and its financing team (PFM, bond counsel and underwriters) covering the annual investment report, a proposed tax‑anticipation note and new‑money certificates of participation for capital projects.

Dominic Cristoforo of Deep Blue told the board the district’s investment portfolio totaled roughly $527,500,000 in operating and bond proceeds accounts and produced about $21.7 million in interest income in the fiscal year. He said the portfolio is designed to prioritize safety and liquidity, with return secondary, and confirmed the investments complied with district policy and Florida statutes.

PFM’s Laura Howell outlined short‑term market volatility and said market expectations around the Federal Reserve could affect timing and rates. She gave an example market quote that put a 20‑year true interest cost near 4.03% as of the prior close, and described a proposed tax‑anticipation note (TAN) resolution with a not‑to‑exceed par of $55,000,000 and an anticipated actual issuance of $45,000,000, with final maturity in February 2026; the district would consider a rate‑lock before closing if market conditions warranted.

On new‑money financing, PFM presented a plan for roughly $230,000,000 to support several projects, including a new high school (approximately $182.5M), Moody Elementary campus upgrades ($30M) and a Lake Manatee K‑8 addition ($17.5M). The presentation compared two amortization approaches — level principal & interest versus a wrap/aggregate structure — and modeled the effect on annual debt service and on the district’s use of the 1.5‑mill capital tax and impact‑fee‑eligible projects. PFM emphasized a conservative guideline of keeping new certificate/lease payments below 50% of the 1.5 mills (legal limit is 1.125 mills) to preserve future borrowing capacity and manage rating‑agency expectations.

Advisers also called out a potential current refunding of outstanding 2016A COPs (roughly $23.76M outstanding, with $20.49M eligible in 2027–29) that could produce material cash‑flow savings depending on market conditions; tax rules now require current, not advanced, refundings and restrict timing to within the call window.

Board members asked detailed questions about the assumptions behind millage calculations, the role of impact fees in offsetting debt service, the effect of additional borrowing on credit spreads and whether lengthening maturities would permit earlier principal prepayments. Bond counsel and advisers explained key constraints (IRS limits on weighted‑average maturities tied to project useful life, 10‑year call protections that limit early prepayment, and the difference between bank and public market structures). PFM recommended bringing the new‑money and refunding matters to the board for formal consideration on Oct. 28 and asked for delegated authority within stated parameters so staff could execute if market conditions met the approved ceilings.

Ending: No formal votes were taken at the workshop; the board was scheduled to consider the TAN that evening and to review resolutions for new‑money and any refunding on Oct. 28. Advisers emphasized that market volatility could change pricing and that final decisions would depend on day‑of‑pricing results.