Bond refinancing could save KCSD significant money on debt service
By Steven Hoffman
The Kennett School Board acted on a recommendation by the administration and authorized district officials to continue the process of refinancing and restructuring general obligation bonds. The restructuring is expected to reduce the district’s annual debt service obligation while extending the overall time that the district will be paying off the debt by two years.
At the Oct. 12 school board meeting, business administrator Mark Tracy led the presentation regarding the plan. Tracy explained that there was an extensive presentation at the Finance Committee’s meeting on Sept. 21, and district officials considered several options, including capturing all the refinancing savings upfront while maintaining the existing annual debt service. There were also two options to restructure the refinanced debt to reduce the annual debt service over the entire duration of all the district’s bond issues.
Tracy said that district officials, working primarily with Public Financial Management as the financial advisor, reached the strategic decision to pursue one of the options that would reduce the debt service payments over the life of the debt, giving the district extra flexibility when it comes to developing the annual budget in the upcoming years.
The school board approved the resolution.
District officials will be working with Kegel Kelin Almy & Lord LLP as bond counsel, RBC Capital Markets as managing underwriter, as well as the district’s solicitor, to prepare the necessary documentation and approvals to proceed with the refinancing and issuance of restructured debt. This refinancing will take place in two stages, one late in 2015 and the other early in 2016, because it is advantageous to do bond issues for under $10 million.
While the school district had the option of taking all the savings up front, the financial advisors thought it would be much more beneficial longterm to save on the debt service payments year after year instead.
School board member Michael Finnegan, who serves on the district’s finance committee, said that it’s better to extend the debt by two years, which will even out the debt services payments, instead of raising taxes on the public in future years.
The Kennett School Board approved the appointment of Dr. Yvette Line-Koller as the director of special education. Line-Koller earned a bachelor’s degree in psychology from Shippensburg University, her master’s degree in school psychology from Millersville University, and a doctorate in education administration from Immaculata University. Dr. Line-Koller served nine years as a school psychologist and most recently was the director of student services in the Warwick School District.
Superintendent Dr. Barry Tomasetti said that there were 28 candidates for the position, including seven who made it through the first round of interviews and four that participated in the second round of interviews.
In his superintendent’s report, Tomasetti talked about the recent planned searches that took place in the middle school and high school. The superintendent said that several other school districts in the area also conduct searches of lockers and classrooms to look for drugs or anything that would compromise school safety.
“We want to make sure that we keep drugs out of schools,” Tomasetti explained.
He added that a school resource officer is once again assigned to Kennett schools. The district collaborates with the Kennett Police Department on this initiative to have a police officer work on the school campus. Grant funding has been available to help offset the costs for the school resource officer position.
“I think everything we do increases the safety of our schools,” Tomasetti said.
The Kennett School Board will meet again on Monday, Nov. 9 at the New Garden Elementary School.