Less interest in debt refinancing
Ephrata Area School District’s School Board has approved the next steps in allowing the district’s current debt bonds to be financed an attractive rate of 2.2 percent.
The savings could bring a savings of about $908,000 in interest paid over the course of the new debt, officials said.
The board the voted unanimously to retire the 2007 series general obligation bonds through a new general obligation note issued through an Adams County bank.
“During the first two years debt service will be $187,000 and $234,000 respectively,” said Kristee Reichard, business manager. “From there, that amount will be roughly $90,000 per year.”
Reichard noted that the strategy will change the debt format, from public bonds which could be purchased by anyone on the open market, to a more traditional bank loan.
Bonds were the best financial product for servicing debt until the size of the district’s debt could be lessened finance through a more acceptable level to banks.
The district’s debt – now under the $10 million – provides various new opportunities for refinancing.
The total amount being refinanced in the process is set at $9,990,000.
Scott Kramer from RBC Wealth Management, and Peter Edelman, Bond Council from Stevens and Lee, advised the board to endorse the plan. Kramer and Bond expressed amazement at the competitive nature of the bidding process, leading in the end to the very impressive secured rate of 2.2 percent.
“We solicited approval through various local banks,” explained Kramer, noting efforts with Ephrata National, Fulton and Susquehanna Banks, all of which were eager to earn the district’s business. “It caused everyone to sharpen their pencils,” he said.
Board member Glenn R. Martin questioned Kramer regarding the soundness and quality of the bank. He was assured it was a sound financial institution very similar to Ephrata National Bank.
“This is just a phenomenal number,” said Kramer. “In fact, there was so much savings we had to spread that out over a longer period of time. That is an enviable position to be in! You are the beneficiary of a very good rate. These are off the charts! This is great news!”
Edelman agreed and indicated the transaction should be complete and could be closed by the end of May.
Overall, the savings which will be realized will translate into 9.4 percent savings.
Reichard said debt service for the first two years of the new loan will be slightly higher than for the remaining years until the debt expires in 2022. And, she added, this does not change the length of time originally anticipated for loan payoff.
While the interest rate seemed to astound Kramer, Reichard pointed to the solid financial footing of the district brought about through many years of sound, careful fiscal leadership both under former District Superintendent Dr. Gerald Rosati as well as the new administration of Dr. Brian Troop.
In staffing news, the board approved the resignations of James Beckley and Tiffany Hoffman, who had served as assistant marching band directors. Both resignations take effect by the end of April. As part of the board’s consent agenda, Anthony Kirchner and Kristie Ohlinger to fill both vacancies. Last month the board voted to hire middle school band director Stephen Goss as the new marching band director.
The board also voted to hire Joy Rice to be the new head field hockey coach for the 2014-2015 school year. Rice replaces Rhoda Mountz who retired.
In other district news, residents Lisa Kachel and Laurie Fahnestock spoke to the board during the public comments portion of the meeting, thanking the district on behalf of all the parents of this year’s graduating seniors for assuring them graduation ceremonies would be held outdoors as in years past. There had been some question about location for this year’s ceremony as the district considers a project to convert the Ephrata War Memorial Field into a new artificial turf surface.
Possible field renovations had threatened concerned the board, which had considered moving graduation ceremonies to either the district gym at the Ephrata Middle School or perhaps off campus for the first time in over fifty years.
Now, the only thing that can prevent the class of 2014 from signing off from the War Memorial field would be a change of plans administered by Mother Nature herself.
For a wealth of additional Ephrata School District information, please visit their website at www.easdpa.org. Gary P. Klinger welcomes your feedback via email at email@example.com or on Twitter, www.twitter.com/gpklinger.