Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Debt topic
No spam. Unsubscribe anytime.
Board hears plan to prepay 2024 bond and confirms tax-rate limit
Summary
Staff told the board the district will present analysis at the Aug. 24 meeting on prepaying the 2024 bond (5% coupon) and said the district's tax rate will not exceed 4.9163; staff also said prepayment carries no penalty and can only use funds from the debt service fund.
Staff previewed a proposal to prepay portions of the district's debt and said a full analysis of potential interest savings from defeasance of the 2024 bond will be presented at the Aug. 24 board meeting. "3 of the last 4 years, St. Joseph School District strategically prepaid debt, from a debt service fund," a staff presenter said, and noted the 2024 bond carries a 5% coupon while the district currently earns about 3.6% on debt-service balances.
Board members asked how prepayment would affect financial flexibility. The presenter said prepayments must come from the debt service fund and are restricted to debt payments, and "it doesn't take away from capital projects, doesn't take away from operations" and that reducing debt can increase flexibility in the future. He also said there are no prepayment penalties for the bonds under consideration. Separately, staff reminded the board that Missouri law controls the district's August tax-rate setting and that the total tax rate will not exceed the current 4.9163; the operational and debt-service levy breakdowns will be filed with the state auditor for confirmation.
