Record low interest rates attracts SCC board
At Monday's regular meeting, a skeleton St. Croix Central School Board directed Baird Financial representative, Brian Brewer, to prepare a resolution to help guide the board in determining how best to refinance the district's outstanding debt.
Historically low interest rates present the board with an opportunity to save as much as 7 percent or roughly $600,000 dollars over the remaining 10-year term of their 20-year obligation. Brewer promised to have the resolution ready for the board to consider at their next board-learning meeting scheduled for Monday, March 5.
The resolution will also include a provision delegating authority to the president and clerk to sign off on the final refinance agreement providing the board with flexibility to act efficiently to take advantage of optimum interest rates.
"We've been monitoring your debt profile for some time to find the right spot where we can refinance the existing debt to lower the interest," Brewer said. "When you locked in your interest rates back in 2005, rates were very favorable at that time historically speaking. Rates went higher in 2006 and 2007 and the beginning of 2008. And then the world changed as we know it in terms of the financial market at the end of 2008. Since then, we've been establishing new lows. This has created a new opportunity for you to consider for reworking the 2005 bonds to lower your interest costs."
Brewer said the district can replace the 4.5 percent and 4.75 percent rates on their current debts with new borrowing rates that average 2.16 percent, cutting the interest rate by more than half.
Superintendent David Bradley said the district would like to use the savings to first address repairs and upgrades to facilities, followed by more classrooms down the road as enrollment increases.
Brewer said the district could potentially borrow up to an additional $14 million over the next 10 years while maintaining the existing debt service of roughly $1,800,000 to tackle their facility needs.
Board member John Hueg summed up the opportunity, "Don't tempt fate. There's more room (for interest rates) to go up than there is to go down."
Board member Kay Zwald concurred, "It's a no-brainer."
In other news:
* Bradley urged the board to provide written notice of intent to renew or non-renew individual teacher contracts right away even though recent legislation moved the deadline date back two months. He felt it is an opportunity to provide teachers some assurance that they have a job next year. He reported the savings to the district on health insurance since switching from WEA Trust to Medica will be $35,000 as of this June and may be realistically estimated at $160,000 for next year. The superintendent acknowledged the district purchased new bus routing software for $5,000 with the rationale being a new route could cost $35,000 annually while the new software will improve the efficiency of existing routes.
* Bradley said he and President Howard Kruschke plan on contacting the former teacher negotiation committee in an effort to establish local retirement benefits similar to the benefits afforded teachers and other staff prior to the enactment of Act 10 for at least this year and the following two years
* State bound wrestler Marcus Malecek was designated as the 2012 State Academic Scholarship recipient.
* The board accepted the resignations of Mike Fern, varsity boys baseball coach; Lisa Holmgren, health assistant; and Ashley Kruszka, first grade teacher; and approved the appointments of Nicholas Haug as director of 2012 summer school, Gary Larson as assistant middle school wrestling coach and Jason Koele as varsity boys baseball coach.
* The board approved Jennifer Olson's recommendations with regard to the number of spaces available for regular and special education students for open enrollment. They also approved both the 2012-13 school calendar with several revisions pertaining to dates with conflicts and a seven-week 2012 Summer School Calendar divided into three weeks in June, two weeks in July and two weeks in August.
* A total of 117 of a possible 135 parents have signed up for Kindergarten Round-Up, according to Principal Steve Sanders who also reported last year's second place spelling bee finisher, eighth-grader Ariel Backes will attempt to make it five straight district competitions this Wednesday.
* Valedictorian Marcus Malecek and Salutatorian Holly Meyers will head a class of 30 honors students, up two from last year. 2012 Graduation is set for Memorial Day weekend avoiding any conflict with Good Neighbor Days on the preceding weekend and getting seniors out two weeks before the end of school giving them a jump on looking for summer jobs.