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PFM: William Penn SD's 2026 bond sale locked low rates but requires near-term budget adjustments
Summary
PFM financial adviser Melissa Mays told the William Penn SD Finance Committee that the district's 2026 bond sale yielded a 4.04% average rate (the lowest locked since 2020). The sale reduces long-term debt service overall but requires identifying roughly $1.34 million in additional budget dollars in 2027 and smaller amounts in 2028.
Melissa Mays, the district's independent financial adviser with PFM, told the William Penn SD Finance Committee that the district's 2026 bond sale captured unusually favorable market levels and a programmatic AA3 rating that helped lower borrowing costs.
Mays said the issue's yield was 4.04 percent, "the lowest interest rate we've locked in since 2020," and credited the underwriter, Raymond James, for identifying investors who would buy the bonds at attractive levels. She said rates had trended down since October before recent geopolitical events pushed rates up again, and the district locked in rates before that rise.
The presentation included a loan-by-loan debt-service summary. Mays said the new borrowing will add roughly $613,000 in debt service in fiscal 2027 and about $714,000 in 2028; the district's total debt-service run rate will be about $7,025,000. Because the issue came in at better-than-expected pricing, overall debt service is about $1,245,000 lower than prior projections and the district realized an incremental construction-fund benefit of roughly $200,000.
Mays cautioned that the budget team will still need to identify approximately $1,340,000 in additional dollars in the 2027 budget to absorb timing and payment changes from the new borrowing, plus roughly $108,000 in 2028 if no additional borrowing occurs. She also described continuing monitoring for refunding opportunities on callable issues, saying staff and PFM will bring recommendations to the administration and board if market conditions warrant.
On outstanding balances, Mays said the district's principal outstanding is about $100 million; principal plus interest totals about $161 million, with a net effect to taxpayers of roughly $159 million after certain reimbursements. She noted the amortization schedule runs to about 2051 but observed the district may borrow again during that period depending on capital needs.
The committee had no formal vote on the presentation; the report was received for budget planning and further administrative follow-up.
