If the Mexico Public Schools Board of Education wants to ask voters for authorization to sell more bonds next year it’s in good shape to do so according to the district’s agents who have …
If the Mexico Public Schools Board of Education wants to ask voters for authorization to sell more bonds next year it’s in good shape to do so according to the district’s agents who have handled the last three bonds.
Courtney Wegman, CPA and vice president, and Larry J Hart, president, and CEO, of LJ Hart & Company met with the board last Tuesday, May 16, to give an update on the district’s current situation and for a chance to acquaint new board members Jessica Eskern and Matt Pilger who both joined the board last month with the company and the past bonds issued.
The last time Wegman and Hart met with the board was in late 2021 when the district decided to refinance and have done refinancing in 2016 and 2012. Hart said these types of meetings help the board plan long-term.
“We try to make it friendly to what the district knows is coming,” Hart said. “It seems to work well to have a long-range plan.”
The last refinancing saved the district about $1.4 million according to Wegman. The district was able to lock in a rate lower than one percent. She said in the current financial market with rising interest rates it could be difficult to beat the rate the district currently has.
“The interest rates on the 2020 and 2021 bonds are really low,” Wegman said. “I doubt we’ll be able to refinance them but never say never.”
Wegman said the district’s assessed valuation has been trending in an upward direction for the past five years with an average growth of about 3.3 percent each year. The debt service levy in that time has remained in the $0.86 to $0.87 range per $100 of assessed valuation since it made the jump from $0.58 in 2015.
Wegman said Missouri’s Hancock Amendment could force the district to make some adjustments to the levy if assessed valuations come in high enough to trigger the mechanism. In that case, the district would be required to lower the debt service levy but it can be maintained by decreasing its operational fund and moving it over to maintain the overall levy in the debt service fund.
Hart said if the district does go to voters it would be a no-tax increase bond. In other words, the current debt service levy would be maintained.
“If we had declined (valuations) then we would have to say maybe we go make a levy adjustment or some other things but we wouldn’t necessarily be talking about a no-tax-increase bond if those balances weren’t growing,” Hart said. “You’re in a good position.”
The district will pay off one of its bonds next year with a balloon payment the board has been saving up for. Each year since 2014 the board has been setting aside $250,000 for that payment. The two other bonds are callable in 2026 and total about $9.5 million. Callable means the district could pay off the bonds with no penalty.
Wegman said the district is projected to have about $250 million in assessed valuation. The law will allow a district to bond up to 15 percent of its valuation capacity minus any current debts. Wegman said under that scenario the district could bond up to $27 million if needed.
If the district decided to ask voters for bonds it would have to do so by Jan. 23, 2024, to get on next year’s ballot which wouldn’t leave a lot of time for voters to get informed. Wegman said her company will help in developing ballot language and can consult. She said bond issues in the past that were successful had a lot of work behind them.
“It wasn’t something that was just done in a board meeting,” Wegman said. “There was press and communication with your taxpayers.”
No discussion was had at the meeting on any potential projects or needs the district has that would require a bond issue. The superintendent’s office released a statement to the Ledger saying there are no projects under consideration at this time that would require a vote to issue bonds and that the meeting was for information only purposes.
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