The Board of Education at the New Bloomfield R-III School District voted Thursday night to refinance a $1.9 million general obligation bond at a lower interest rate, saving the district $495,325 in interest payments during the next 14 years.
Issued in 2008 with an annual interest rate of 4.3 percent, the refunded new bond to be issued March 1 carries an annual interest rate of 1.58 percent interest.
"This is a significant savings for the district," said Amanda P. Weis, senior analyst for L J Hart & Co. of St. Louis, the board's bond consultant.
With the interest savings, the new bond also will mature three years sooner on March 1, 2024, instead of on March 1, 2027, in the bond issued in 2008.
The bond was issued to build an addition to the elementary school and also provided a new baseball field and track.
Superintendent David Tramel said the refunding takes advantage of extremely low interest rates, shortens the debt period and also preserves financial flexibility of the district for a no-tax-levy-increase general obligation bond issue.
Board President Gracia Backer noted the new bond also has a call feature in 2016 with no penalty.
"If interest rates are lower on 2016 or later, " Backer said, "we can take advantage of that. Meanwhile, we are locking in these levels that are about 2.5 percent lower than they were in 2008."
Weis said the bonds received an "AA+" rating from Standard & Poors Corporation.
Weis said the bonds were offered to local institutions before other banks throughout the state. Central Trust Bank of Jefferson City has indicated it will acquire $640,000 of the bond.
Weis said the $495,325 in interest savings brings the total amount the New Bloomfield school board has saved by refinancing bonds to $1,521,402.
In other action, High School Principal Susan Dockery announced that Melinda Cline has been named as Teacher of the Quarter for the second quarter.
"Melinda is highly organized, creative, caring, and has made amazing educational strides with all of her students," Dockery said.
Dockery also told the board the high school has started a six-year rotation plan for replacement of textbooks. She said all texts will be evaluated periodically.
If funds are available, she predicted texts will be replaced by electronic versions if all students are issued i-Pads, a portable computer tablet.
Tramel reported the school's budget continues to be on track and balanced.
He pointed out the district's revenue decreased $98,000 during this year and expenses are down by about $90,000.
The reduction in spending, Tramel said, was accomplished by remaining conservative in spending and budgeting.
He warned revenue is likely to continue on a downward spiral and the district also will receive less state aid money next year because the district has approximately 40 fewer students than it did three years ago.