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West Allis–West Milwaukee board approves parameters to sell up to $70 million in bonds
Summary
After a presentation from underwriter Tim Weinsack, the board approved a parameter resolution allowing the district to sell up to $70,000,000 in general obligation promissory notes, delegating market-timing authority and capping interest at 4.75%. The board heard details about credit ratings, arbitrage, insurance and repayment structure.
The West Allis–West Milwaukee School District Board on Thursday approved a parameter resolution authorizing the sale of up to $70,000,000 in general obligation promissory notes to fund projects approved in the recent referendum.
Tim Weinsack, an underwriting representative filling in for another firm official, explained the bond issuance process to the board, including roles for the underwriter, paying agent, disclosure counsel, bond counsel and the rating agencies. He told the board the district is expected to receive a Standard & Poor’s rating of double-A minus and said the district’s large tax base and unlimited general obligation pledge are positives for investors. "We're anticipating the district maintaining their double a minus rating," Weinsack said.
The board heard a detailed explanation of arbitrage rules and the current interest-rate environment. Weinsack and district staff described how investing bond proceeds while projects are completed can trigger IRS arbitrage rules and discussed two exceptions that can apply to school districts. The presenters said the district plans to watch timing closely but that the scope of planned projects favors issuing the full amount rather than phasing smaller issues.
Board members and staff also discussed bond insurance options and a proposed repayment schedule. The parameter resolution sets a not-to-exceed issue amount of $70,000,000 and a maximum interest rate of 4.75 percent, and it delegates authority to the board president and the director of finance and operations to select the sale date and final structure within those parameters.
By voice, the board moved, seconded and approved the resolution following the presentation and a brief Q&A. The underwriter and staff said they will seek the market window in January and return documents and signatures as required.
The board voted to approve the motion; the district will complete signatures and administrative steps after the meeting and monitor credit and market conditions before pricing the bonds.
