On April 6, 2017, the Rock Port R-II School District will close a refinancing of the Series 2014 Bonds saving $587,684 of interest expense. At a special meeting of the Rock Port R-II School District Board of Education on March 2, 2017, a Refunding Bond Resolution was approved that established a final terms committee consisting of Rich Dewhirst, Board President, Craig Walker, Superintendent of Schools, and Larry J. Hart, President and CEO of L.J. Hart & Company. On March 7, 2017 ,the final terms committee was able to lock in the interest rates for $2,700,000 General Obligation Refunding Bonds at an average interest rate of about 2.79%, compared to the Series 2014 Bonds which carry an average interest rate of about 4.59%. The District reduces the future interest expense by about $587,684 and shortens the final maturity of the Bonds by one full year. When the savings of $587,684 is combined with the interest avoided on one other refinancing, as well as the Qualified School Construction and Qualified Zone Academy Bond programs, the total savings reaches $1,708,393 during the past seven years. Mr. Walker expressed enthusiasm and support for the refunding option selected by the Board of Education. “This plan achieves good savings, and provides an opportunity for the District to be in a better situation to present no tax increase building proposals with voter approval,” Mr. Walker remarked.
The Board President, Rich Dewhirst, pointed out that the $587,684 of interest savings for the Series 2017 refunding is not all the District may realize due to the Series 2017 Refunding Bonds having a call feature on March 1, 2022, at no penalty. “If interest rates are lower in 2022 or later, we can take advantage of that. Meanwhile we are locking in these levels that are one and eight tenths percent (1.80%) lower than they were in 2014,” stated Mr. Dewhirst. L. J. Hart & Company of St. Louis, Missouri prepared the refunding proposal and Brad M. Wegman, Vice President of the firm, explained how it can fit into the long range plans of the District. Mr. Wegman mentioned that the three significant factors making the Series 2017 refunding possible were the lower interest rates than in 2014, the fact that the entire $2,700,000 portion of the Series 2014 Bonds are subject to prepayment on March 1, 2019, at no penalty, and the District’s ability to participate in the State of Missouri’s Direct Deposit Program. This program makes it possible for the District to receive a “AA+” rating from Standard & Poor’s Corporation on the refunding bonds. Mr. Wegman complimented Mr. Walker for his prompt and thorough preparations to supply the data necessary for the rating application and official statement, as well as the Board of Education for their foresight in making the Series 2014 Bonds callable in five years.
The Proceeds from the Series 2017 Refunding Bonds will be placed in an escrow account with the UMB Bank, N.A. and reinvested in U.S. Treasury Securities. The earnings from this escrow account meet the interest payments on the Series 2017 Refunding Bonds through March 1, 2019, and prepay the callable Series 2014 Bonds on March 1, 2019. The Series 2017 Refunding Bonds were underwritten by L.J. Hart & Company. The Citizens Bank and Trust continued their strong support of the District by purchasing $745,000 of the bonds according to L.J. Hart & Company. The closing for the Series 2017 Refunding Bond issue is to occur on April 6, 2017. Several board members commended Mr. Walker and L.J. Hart & Company for developing the attractive refunding plan. “It is nice to be able to save $587,684 of our taxpayers’ money for the Series 2017 Bonds and shorten the length of the financing by one full year. We also are pleased to have such strong support from Citizens Bank and Trust” commented Clay Vogler, Vice President of the Board of Education. The legal documents to complete the issuance of the bonds were prepared by Lori Lea Shelley, Esq. of Mickes O’Toole, LLC in its role as bond counsel for the District.