The Board of Education of the Mexico School District No. 59 of Audrain County established a final terms committee consisting of Melissa Chastain, superintendent of schools, Todd Yager, board president, and Larry J. Hart, CEO of L.J. Hart & Company at a regular meeting on Oct. 19 by authorizing a parameters resolution.

It approved the sale of $4.745 million general obligation refunding bonds to its municipal bond underwriter, L.J. Hart & Company of St. Louis within certain reoffering yield ranges. Subsequently, on Nov. 1,, the final terms committee authorized the final sale of the refunding bonds with reoffering yields ranging from 0.30 percent to 1.20 percent to constitute a new effective interest rate of 0.92 percent, compared to an average interest rate of 3.54 percent for the Series 2017 Bonds. Through this refinancing, the District reduces future interest expense by $1,407,098.25, which is an improvement of $29,742.50 from previous conservative projections of the Oct. 19 meeting.  It is the result of the extremely strong current municipal bond market that is producing historically low reoffered yields as well as the good name of the district in the municipal bond credit market.

This $1,407,098.25 plus the savings of $4,087,841.13 from previous refundings and prepayments means that the District has saved $5,494,939.38 of interest expense since 2001.

Chastain expressed enthusiasm and support for the refunding option selected by the board of education. 

“This plan achieves significant savings and allows the district to capture the most favorable conditions in the municipal bond market in over sixty years for the benefit of our taxpayers,” said Chastain. “It also enhances flexibility for the District in the future for building improvements with no-tax rate increase opportunities.:

Courtney B. Wegman, vice president of L.J. Hart & Company, prepared the refunding proposal and explained how it can fit into the long-range plans of the District.  Ms. Wegman mentioned that the three significant factors making the Series 2021 refunding attractive were the lower interest rates than in 2017, the fact that the Series 2017 Bonds are subject to prepayment at no penalty on March 1, 2022, and the District’s ability to participate in the State of Missouri’s Direct Deposit Program.  This program makes it possible for the district to receive an “AA+” rating from S&P Global on the refunding bonds. Wegman complimented Mrs. Chastain and the business manager, Michelle Karhoff, for their prompt and thorough preparations to supply the data necessary for the official statement, as well as the board of education for their foresight in making the Series 2017 Bonds callable in five years. The Series 2021 Refunding Bonds will also have a five year call feature of March 1, 2026 at no penalty.

The Series 2021 Refunding Bonds were made available to local financial institutions as part of the marketing procedure. HomeBank has agreed to purchase $1 million and The Callaway Bank has committed to $1 million of the bonds as well. The closing for the Series 2021 Refunding Bond issue is to occur on Dec. 1, 2021.  

Chastain stated that she was pleased efforts were made to accommodate local investors. 

“It is great that our marketing procedures facilitated this local involvement while still receiving attractive reoffered yields to the March 1, 2026 call date,” she said, “and we appreciate the support of HomeBank and The Callaway Bank.”

Several board members commended Chastain and L.J. Hart & Company for developing the attractive refunding plan. 

“We are glad to be able to save $1,407,098.25 of our taxpayers’ money by taking advantage of the most favorable conditions in the municipal bond market in over sixty years,” stated Yager.