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Penn Manor board asks administration to begin talks with Raymond James about lowering bond fees
Summary
A board member urged the administration to negotiate Raymond James' historic bond discount of $8.75 per bond, estimating more than $1.1 million in underwriter discounts over $125 million in borrowing; the board directed administration to open discussions but made no procurement change at the meeting.
Board members spent the latter portion of Monday's meeting discussing professional fees tied to planned bond issues and whether the district can reduce underwriter discounts.
A board member raised the issue of Raymond James' historic fee: "At the $8.75 per bond that has been the historic Raymond James fee ... that's going to be over $1,100,000 of spend over the next few years, if we do $125,000,000 worth of bonds," the member said, and asked the administration to see if that fee could be lowered. Members compared recent local sales (Hempfield, Central Bucks) where bond discounts reported to the board were as low as $6.00 to $7.50 per bond, noting that bond-sale size and the presence of a financial advisor (FA) can affect fee structure.
Several directors cautioned for "apples-to-apples" comparisons: an FA charges for services and lower underwriter discounts seen elsewhere may reflect that added cost, different issuance sizes, or amortization structures. The board asked administration (and specifically Dr. Gayle and Mr. Ford) to begin discussions with Raymond James to explore whether the district can secure a lower bond discount, while also collecting comparative data on issuance sizes and total issuance costs.
Why it matters: Over a multi-year capital program, small per-bond differences can aggregate into six-figure sums. Board members framed negotiation as due diligence, not a commitment to change underwriters.
Action taken: The board directed administration to initiate discussions with Raymond James to explore lowering the underwriter discount; members did not vote to change procurement practices that evening.
