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Belleville board closes hearing and approves second reading of $38M refunding school bond ordinance
Summary
After a public hearing in which residents questioned projected savings and municipal debt impacts, the Belleville Board approved the second reading of a refunding ordinance authorizing up to $38 million in refunding school bonds; bond counsel said the transaction proceeds only if statutory net-present-value savings meet or exceed 3%.
The Belleville Board of Education on Tuesday closed a public hearing and approved the second reading of an ordinance authorizing the sale of not-to-exceed $38,000,000 in refunding school bonds.
The hearing drew questions from residents about the mechanics and net savings of the transaction. Michael Sheldon, a resident and former board member, asked how the district could project roughly $1.48 million in debt-service savings when a supplemental municipal debt statement included a large estimated increase in gross municipal debt. “If the town hall is incurring nearly … $285,000 … as a result of the authorization of the refunding school bonds,” Sheldon asked, “does that subtract from the $1,480,000 you’re claiming?”
Board bond counsel Tony Salamides of Alliance, Goldman & Spitzer answered in detail, saying the district is refinancing debt it already owes and that municipal and school-borrowing capacities are separate. He explained that the municipality does not “guarantee the debt” of the district; the supplemental debt statement reflects a not-to-exceed estimate that includes interest and is revised once bonds are sold. Salamides also said the financial adviser’s numbers presented by the business administrator were net of expected professional costs and that state law requires the refunding to produce at least a 3% net-present-value savings before the board may proceed.
“Those numbers all reflected the cost paid for the professionals,” Salamides said, summarizing the board staff presentation. “So those are all net savings to the school district.”
After counsel’s explanation, the board voted by roll call to approve the ordinance and related finance resolutions authorizing officials to proceed with the sale and issuance, subject to final market conditions and statutorily required savings. The roll-call record indicated unanimous approval by the trustees present.
Next steps include working with the district’s financial adviser to finalize pricing; the business administrator noted that projected savings depend on market conditions at the time of sale and that the bond sale will not extend the bonds’ existing maturities.
The hearing and vote were part of a broader financial update the board received about ongoing facility consolidation and a timeline adjustment for the district’s budget work based on a delayed state aid announcement.
