AVENUE CITY R-IX SCHOOL DISTRICT OF ANDREW COUNTY, MISSOURI APPROVES SALE OF $3,900,000 GENERAL OBLIGATION BONDS
The Board of Education of the Avenue City R-IX School District of Andrew County, Missouri at a regular meeting on August 10, 2023 approved the sale of $3,900,000 General Obligation Bond Issue to its Municipal Bond Underwriter, L.J. Hart & Company of St. Louis, Missouri. "We appreciate the strong vote of confidence we received from local patrons at the election and want to lock in interest rates that are still favorable in the current rate environment," stated Travis Elifrits, President of the Board of Education. These new money General Obligation Bonds were approved by about 87.50% of the voters at the April 4, 2023 election, for the purpose of providing funds to expand the gymnasium/physical education classroom, add additional gymnasium bleachers, construct an addition to the Middle School, and to upgrade existing utilities and infrastructure.
The bond marketing process provided the first opportunity to invest to local financial institutions and according to Thomas J. Pisarkiewicz, President of L.J. Hart & Company, Southern Bank purchased $200,000 of the bonds. This local support was helpful to the success of the financing. “It is nice that our marketing procedures facilitated this local involvement while still receiving attractive interest rates,” commented Rebecca Grimes, Superintendent of Schools.
The Board of Education selected the negotiated sale of the bonds in order to capture current market conditions, to be certain that local banks received an opportunity to purchase the bonds, and because the proposed interest rates were fair based upon current conditions in the municipal bond market. Ms. Grimes stated that the District did compare proposed interest rates with the Municipal Market Data (MMD) index and other Missouri issues with a similar rating quality sold at competitive and negotiated sales to be certain that rates for the District’s bonds were favorable. “Based upon pricing of these other financings, and the MMD index for “AA” rated General Obligation Bonds our rates were consistent with other financing with a similar quality level of bond issue,” Ms. Grimes remarked.
The information shared by L. J. Hart & Company indicated that the bonds are scheduled to mature on March 1, 2025 through March 1, 2039 with reoffering yields ranging from 3.250% to 4.000%which produces additional funds for the projects in the amount of $213,485.75. The interest income from the bonds is exempt from federal and state of Missouri income taxes and the bonds were available in $5,000 denominations.
These bonds carry a "AA+" rating from S&P Global due to the District's participation in the State of Missouri Direct Deposit Program coordinated through the Missouri Health and Educational Facilities Authority.
The bonds do contain optional redemption (call) provisions on March 1, 2028 at no penalty that will facilitate the reduction of future interest expense in the event of prepayment or a future refunding to lower rates if market conditions make it economically feasible. The financing proceeds are expected to be available to the District by August 24, 2023 and will be promptly reinvested by the District to earn additional interest for use in the completion of the projects. The legal documents to complete the issuance of the bonds were prepared by Rick McConnell, Esq., of Armstrong Teasdale, LLP in its role as bond counsel for the District.