JEFFERSON — School District of Jefferson taxpayers’ money will go further with the passage of two refinancing measures approved by the board of education Monday night.

Interest rates have been pushed to new lows by the pandemic, so it made sense to look at potential refinancing. The district worked with Baird Financial to check rates and advise when it made sense to snap up a better interest rate.

Being refinanced are old loans related to 2014 building projects and energy efficiency exemption funds.

The 2014 borrowing had five remaining years of payments scheduled, while the energy efficiency borrowing had 14 years left.

Refinancing the loans now took additional paperwork, but was well worth it in reducing the district’s future interest payments.

Approved at Monday night’s school board meeting were two related resolutions.

The first authorized the issuance and sale of approximately $11,318,000 in taxable (convertible to tax-exempt) general obligation bonds, Series 2020A.

The second resolution authorized the issuance and sale of approximately $1,128,000 taxable general obligation refunding bonds, Series 2020B.

Together, those actions will save the district $697,201. This represents a savings of 6 percent over what the district would otherwise have been paying, and the Baird consultant said that it pays off to refinance if the savings achieved will reach at least 3 percent.

These loans can be refinanced again if rates drop again in the future, the representative said.

Also related to finances, the school board acted Monday to authorize a promissory note for cash flow purposes in an amount not-to-exceed $1.5 million.

This is a measure the district takes every year at this time to make sure the district can cover bills once it has started incurring expenses for the new school year but revenues from taxes have not yet come in.

“The schedule of payments doesn’t always align with when the revenues come in,” said Laura Peachey, director of business services for the district.

“November is traditionally our cash-poor month,” Peachey said.

Actually, the district has been fortunate enough to avoid using the promissory note in recent years, she noted, even though this measure is undertaken every year just in case those funds are needed.

With additional and sometimes unexpected costs related to the pandemic, however, this year is projected to be “very cash poor” in comparison, the business director said.

“I do anticipate using it this year,” Peachey said. “There are lags in payments from the IRS, which apparently shut down.”

It’s possible the district will not be able to issue the final paychecks due to employees before expected revenues arrive in early December, Peachey said. Once these expected revenues arrive, the district would immediately pay back the loan, thus incurring the lowest costs.

The district sought bids from several financial institutions and Badger Bank came in with the lowest bid, of 1.9 percent.

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