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Southern Door board authorizes escrow to defease portion of 2023 bonds to realize interest savings
Summary
The board authorized establishment of an escrow account and transfer of levied fund 39 reserves to defease certain General Obligation School Building and Facility Improvement Bonds, Series 2023A. PMA advised the move would yield long‑term interest savings after an upfront cost.
The Southern Door County School District Board on June 16 authorized the transfer of previously levied fund 39 reserves to an escrow account and approved a resolution to defease specified maturities of the district’s General Obligation School Building and Facility Improvement Bonds, Series 2023A (dated Feb. 9, 2023).
Board staff and PMA Securities LLC presented a plan explaining how using levied but unspent fund 39 dollars to establish an escrow could redeem or defease obligations maturing March 1, 2032 through March 1, 2035. The board was told the measure would reduce the district’s overall interest cost and smooth future debt‑service payments for budget planning.
Charlie, the PMA representative, described the transaction and said the upfront cost to effect the defeasance would be approximately $17,000 but that projected interest savings over the life of the defeased obligations would exceed that fee. "Because the funds have already been levied, they're sitting in our account," a staff speaker said, arguing this was a strategic use of reserves to realize savings and stabilize levies.
The resolution authorized establishing an escrow agreement with Associated Trust Company, N.A., Green Bay, Wisconsin, retention of PMA Securities LLC as financial adviser, Orles & Brady LLP as bond counsel, and Robert Thomas, CPA LLC for mathematical verification. After a motion, second and roll‑call vote the board adopted the resolution on 06/16/2025.
Board members asked for a copy of the PMA presentation and clarified whether fees would be charged to fund 39; PMA and staff confirmed the funds were in district accounts and that the small fee would be offset by long‑term savings.
The board directed officers and agents to finalize escrow deposit details and notices of defeasance and redemption as provided by the escrow agreement.
