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Mechanicsburg board hears bond refunding results; staff report roughly $439,000 net savings
Summary
District officials reported results of an auction to refund a portion of the 2018 bond issue, saying the lowest-bid true interest cost was about 2.84% and that net savings after costs are approximately $439,000. The board was asked to authorize issuance and adopt a resolution to refinance selected 2018 bonds.
Mechanicsburg Area School District officials told the school board on Oct. 7 that an auction to refund part of the district's 2018 bond issue produced competitive bids and is expected to yield net savings.
A district finance presenter summarized the auction results and said nine firms submitted bids; the lowest true interest cost reported was about 2.84 (Janney Montgomery Scott), with a close spread among bidders. The presenter explained the district chose not to include a call feature on the new issue to maximize savings, and he pointed to a one‑page summary showing roughly $416,000 in fiscal-year savings and a net savings figure presented to the board as approximately $439,000 after fees and costs.
"We conducted an auction for the refinancing... we have the results and the ultimate savings," the presenter told the board, noting strong market interest and condensed bidding.
Rhonda Lord of Saxton & Stump, the district's bond counsel, walked the board through the resolution and required Department of Community and Economic Development filings. She said section two of the draft resolution authorizes issuing debt in the amount of $8,870,000 to refund portions of the 2018 bonds, section three states compliance with the Pennsylvania Debt Act, and later sections set the bonds as general obligation, establish the budget covenant and continue tax‑code and continuing disclosure covenants. Lord also noted the refunding call date for the refunded bonds and described exhibits that include the debt‑service schedule and the winning bid form.
Miss Morgan moved to authorize the insurance (if desired) and adopt the attached resolution to refinance certain 2018 general obligation bonds; the board recorded the roll call as a unanimous vote.
District staff also highlighted the S&P credit commentary included for bidders, which noted positive financial performance and a strong general fund balance as credit strengths.
Board members thanked staff and advisors for conducting the transaction. The resolution and related authorizations were approved by unanimous roll call during the business portion of the meeting.
Follow-up steps for the board include executing the paperwork for the winning purchaser and filing required documents with DCED as outlined by bond counsel.
