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Board authorizes escrow to defease portions of 2018 school bonds, cites $900,000 savings this year
Summary
The board approved a resolution to deposit funds into an escrow to defease portions of the district's 2018 general obligation school building bonds; presenters said the moves are expected to save about $900,000 this year and that $10.7 million has been defeased over the last six years.
The DC Everest Area School District board on May 20 authorized an escrow agreement and related professional services to defease portions of its Series 2018 general obligation school building and improvement bonds.
Finance staff said funds available in debt-service and related accounts will be deposited into an escrow invested in direct U.S. obligations and used to pay principal and interest on specified 2028, 2033 and 2034 maturities at an April 1, 2027 redemption date. Presenters told the board the action is necessary because the bonds are not currently callable and that the escrow structure will accomplish early redemption of targeted maturities.
Kelly (district finance) told the board the anticipated savings from this transaction for the current year are just over $900,000 and that the district has defeased roughly $10.7 million over the past six years. The board authorized retention of PMA Securities LLC, counsel and verification services as part of the transaction and approved the related escrow and redemption notices. The resolution passed by roll-call vote with all members recording yes.
