Franklin Regional board moves to make final borrowing on Sloan ‘elementary campus’ project
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Franklin Regional school board members opted to move ahead with combining the final two bond issues for the Sloan “elementary campus” project into one, taking advantage of current interest rates and borrowing the final $15 million necessary to complete the work.
The board’s 7-1 vote empowers bond consultant Chris Bamber, of PFM Financial Advisers to build a “box” in which the bond issue’s financing must fit.
Board member Bill Yant voted no; board member Gary English was having issues staying connected to the board’s online Zoom call and was not present.
In this case, the “box” would see roughly $850,000 in debt service spread out over the first two years, followed by steady annual debt service of about $830,000. The box also includes a maximum principal of $17.5 million and a maximum interest rate of 5.5%
Part of Yant’s “no” vote centered on setting the borrowing limit at $17.5 million, rather than the $15 million needed.
“There’s no intent to borrow that amount of money,” district Financial Services Director Jon Perry said. “It’s just to provide flexibility in structuring the debt. We’d still target around $15 million.”
Yant also disagreed with a language change, recommended by the board’s finance committee, that would permit the district to use any remaining money on the bond for other capital projects.
“I think that is different than our original intent, and I believe that is wrong,” Yant said. “I think we should limit the money to what we need to finish those schools, because that’s what we set out to do.”
In addition, the board also voted to refinance the debt on bonds issued in 2013 to take advantage of current interest rates. Board member Ed Mittereder asked Perry if it was worth refinancing other older debt.
“The rate environment is certainly friendly,” Perry said. “Our next oldest debt is the 2017 series, (the first bond issue on the Sloan project), which is relatively recent. So they aren’t eligible to call until 2023. “But if the rate environment is still the same way, we can certainly look at refinancing,” he said.