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Board hears financing plan for referendum borrowing; first issuance proposed for June
Summary
The district’s public finance advisers recommended a staged borrowing approach and proposed a $20 million initial issuance to meet near‑term cash needs without overborrowing; no financing action was taken — the board will consider bond approval in June.
At a May 11 workshop, Howard‑Suamico School District financial advisers from PMA/PTMA briefed the board on options for borrowing the $147 million capital referendum approved by voters and the related $2 million operational override.
Eric Kass (PMA) described current interest‑rate conditions, recommended guarding against arbitrage by avoiding borrowing substantially more than near‑term cash needs, and outlined a preliminary draw schedule supplied by construction manager Myron. PMA presented a plan that would issue an initial $20 million (10‑year amortization) to secure liquidity for early engineering, design and initial construction bills, then stage the remaining borrowings across subsequent issuance cycles to limit interest costs and preserve tax‑rate flexibility.
PMA cautioned that draw timing affects amortization length (borrowing before March 1, 2027 could reduce available amortization years); the advisers also factored in conservative projections for interest and valuation. In their model, conservative assumptions produced a projected levy flattening at about $12.8 million for fund 39 and suggested the combined operational and capital borrowing could be roughly $0.10 less on the mill rate than earlier estimates, though PMA emphasized that state aid developments and market conditions could change outcomes.
Board members asked whether pending state budget actions (discussed earlier in the meeting) could lower the district’s mill rate; PMA said the proposals under consideration in Madison could provide additional aid or tax rebates but cautioned that those items were not finalized and should not be relied on for immediate planning. No financing motion was requested at the May meeting; staff said a bond issuance authorization would be presented for board approval at the June 15 meeting, with bids and exact sizing dependent on market conditions in mid‑June.
PMA also outlined considerations around amortization and interest‑rate spreads — noting that issuing for 10 years rather than 20 years can yield significant interest savings on the district’s borrowings — and reminded the board of standard federal arbitrage rules if bond proceeds are invested prior to expenditure.
The district emphasized it intends to be fiscally responsible in deploying referendum funds and to provide ongoing community communications about progress and spending.
