In a special board meeting Thursday, the Brainerd School Board awarded the sale of its general obligation taxable bonds to fund Other Post-Employment Benefits, or OPEB.
And because the school district recently received a significantly higher rating from Standard and Poor's for its financial management practices, the board was able to save taxpayers $1.4 million over the next 13 years, or a 3.1 percent savings for taxpayers over the previous tax estimates.
Kristin Hanson of Ehlers and Associates, the district's financial adviser, told board members Thursday that her firm received five bids for the sale of the district's OPEB liabilities bond. She said the interest savings between the highest and lowest bids was $800,000. The highest rate was 4.84 percent while the lowest bid received was 4.446 percent.
The board accepted the lowest bid by Morgan Keegan and Co. Inc. in Memphis, Tenn., at a 4.446 percent rate. Because of this rate and the district's S&P's A+ rating, the bond amount was for $22.915 million over the course of 13 years, instead of $23.255 million, said Hanson.
"We're very pleased with the results," said Hanson.
Hanson presented the board with a framed award from Ehlers and Associates, congratulating the district for its A+ rating, which is two full ratings higher than its previous rating with Moody's.
Steve Lund, director of business services, said he and his staff worked with S&P about a week ago, sharing the district's audits, its financial management practices and budgetary processes. Lund's background is in banking. He said this was the first time he'd been on the opposite side of this process.
Lund said his goal is to develop a committee that reports to the school board that will manage this OPEB trust. Right now Lund, board member and finance committee chair Molly Kurtzman and Mark Ronnei, a member of the community budget committee, are on a small committee that has been going through proposals to recommend a financial adviser to manage this trust.
Lund said it will be recommended at the June 8 regular board meeting that the trust be established, a financial adviser be hired to manage it and a larger committee be established to oversee the trust.
JODIE TWEED may be reached at firstname.lastname@example.org or 855-5858.
Brainerd Dispatch ©2013. All Rights Reserved.