Springfield Township SD advisers recommend partial refunding of 2018 bonds, request parameters resolution for Feb. 17 vote

PFM Financial Advisors presented a two‑step 2026 financing plan to the Springfield Township SD Finance Committee on Jan. 28 that would (1) refund a portion of the district’s outstanding 2018 bonds to capture lower market rates and (2) sell new‑money bonds to complete middle‑school financing.

Jamie Doyle of PFM said the district’s outstanding 2018 series totals $38,800,000, that the call date has passed and that the coupons on that series range from about 3% to 4% with final maturity in 2039. “We’re suggesting that we simply replace the old higher interest rates with today’s lower rates,” Doyle said, describing the refunding as analogous to refinancing a home mortgage but without extending maturity.

PFM’s example proposes refunding slightly more than $10,000,000 of the 2018 issue, which the firm estimates would produce about $206,868 in net local‑effort savings (roughly 2% of refunded principal). Doyle said about $148,700 of that savings would appear in the current fiscal year, with modest residual savings in later years.

The advisers asked the board to adopt two parameters resolutions—one for the refunding and one for the new‑money sale—at the Feb. 17 board meeting. Doyle explained that a parameters resolution sets maximum principal, a maximum interest rate, maximum final maturity and a minimum net‑savings target so staff and advisers can go to market on the most favorable day without waiting for a board meeting. He said PFM monitors markets and, if bids do not meet the minimum net‑savings target, the firm can recommend rejecting bids; the administration has final acceptance authority after review of the winning underwriter’s report.

PFM explained bank‑qualification considerations: the 2018 bonds (and a likely refunding series) are non‑bank‑qualified due to issue size, and the plan uses statutory exceptions so that only a small portion of the refunding would count against the district’s $10,000,000 calendar year bank‑qualified limit. That preservation of bank‑qualified status would allow the new‑money sale for the middle school to remain bank‑qualified.

Doyle reviewed a proposed timeline: a competitive internet auction for the refunding as early as Feb. 25 with settlement around March 31, and the new‑money sale to be priced around March 12 and settle about April 15; the schedule preserves a 15‑day separation required by federal tax rules for the bank‑qualified strategy. Doyle also reviewed federal tax‑law spend‑down requirements for new‑money proceeds (for example, reasonable expectation to spend 85% of proceeds within three years and to have at least a 5% binding obligation within six months) and said PFM sees no compliance issues given the project’s status.

Committee members asked clarifying questions on board approval requirements and whether the district would be forced to accept unfavorable bids; Doyle reiterated that the parameters resolution is the board action that enables the transactions and that PFM has previously recommended rejecting bids when markets did not hit client targets. The committee did not take a vote; Doyle and staff said they expect parameters resolutions to be ready for the Feb. 17 board meeting.

Next steps: if the board adopts the parameters resolutions, staff and PFM would proceed to solicit bids and report results to the administration; the administration would review PFM’s post‑sale report before accepting any sale that meets the adopted parameters.