BY CHUCK VANDENBERG
FORT MADISON – The Fort Madison School district is considering a way to save $1.3 million over the next ten years.
At Monday’s regular school board meeting, the district heard from Tim Oswald of Piper Jaffray, the firm the district typically uses as bond counselors, who indicated a 10-year moratorium on refinancing the bonds used to build the current Fort Madison Middle School will expire in July.
“You sold those bonds in 2009 and, when you did, you weren’t allowed to pay them off or refinance them for 10 years, but that will be up in July, which means you can take advantage of lower rates if you choose to,” Oswald told the board.
He said the bonds were sold at 4.7% interest, but now rates are as low at 2.9% with some lenders.
The board’s decision on Monday was simply to engage the firm in researching the options for the refinancing of the bonds.
The bonds were sold against the 1-cent local sales tax option called SAVE, the Secure an Advance Vision for Education, program, an option that became available after district voters approved its use in a special election. No property tax dollars were used to pay for the construction or furnishings of the Middle School.
Voters have defeated three times a measure to issue general obligation bonds to build a new Prek-3rd grade elementary school on school property off Bluff Road on the western side of Fort Madison. An attempt in the fall was defeated with 59% of district voters voting for the new building. State law requires a 60%+1 vote supermajority to pass the issuance of bonds.
Oswald said Piper Jaffray would research what options were best for refinancing the bonds, but the refinancing would amount to contracting with another lender to pay off the bonds and then financing the remaining debt at a lower rate, resulting in a savings to the district.
In a related issue, the district also voted 7-0 to place another referendum attempt on the ballot for sevens weeks from today, on April 2. The language of the ballot question includes $30 million to build and furnish the new school on the campus at 48th and Bluff.
District Business Manager Sandy Elmore presented the board with petitions of 321 signatures who agreed to have the question put on the ballot.
The ballot will also include filling two spaces on the school board. Brian Steffensmeier and Josh Wykert are both holding seats that were filled by appointment. Anyone who is interested in running for those seats can submit the proper documentation to the Lee County Auditor’s office.