Newspaper Article Archive of
The Kalona News
Kalona, Iowa

Newspaper Article Archive of
The Kalona News

September 14, 2017 Board members to look to refinance bond
Article Pages -- as published on the The Kalona News website.

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Highland School District

In a unanimous 6-0 decision, the Highland School Board agreed to allow the district to explore options to refinances the districts outstanding principle on their 2009 bond.

Matt Gillaspie of Pipper Jaffray and Co. was on hand to present to the board members on the benefits of refinancing. Superintendent Mike Jorgensen had invited Gillaspie to give the presentation because he thought the time was right to consider the offer.

Jorgensen has his eye on HVAC repairs across the district. At the central site, the goal was to make things more efficient by running on TRANE equipment entirely at a cost of approximately $100,000. Jorgensen also wanted to update the HVAC system at the middle school, which ran entirely on a pneumatic system, which was totally inefficient. Jorgensen had a meeting later in the week to get the estimate for that improvement.

Jorgensen said, once those updates were made, he felt the district would be “set for a while” in terms of infrastructure.

The district had also been talking about a structure to house buses, which would also add necessary storage space.

Refinancing would allow the district to pay off their bond a year earlier and drop their interest rate, which currently ranges from 4.250 to 5.450 over the remaining life of the loan.

In the hypothetical presented to the board, they were quoted a rate of 2.3 percent, though Gillaspie said they’d been seeing rates closer to 2.15 percent.

The board members unanimously agreed that it was the right time to refinance and made a motion to move in that direction. From here, Gillaspie will get an updated cash flow and talk with Business Manager Sue Rich and Superintendent Mike Jorgensen. The trio will look at the financials and goals and decide which way would be best to proceed.

The district could decide to get uniform savings across the remaining life of the loan or get bulk savings in a single year. The latter strategy results in less overall savings, but a greater amount of cash on hand if a large project is in the works.

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