A resolution to refund bonds that will save Defiance City Schools taxpayers money in the future was approved by the Defiance City Board of Education Wednesday evening. The board also heard an update on the EdChoice program, and discussed classes that could be offered to students in 2020-21.
Kent Cashell, of RBC Capital Markets in Cincinnati, was on hand to explain a plan to refinance new money bonds and refunding bonds issued in 2014, in the amount of $14,250,000 into taxable bonds. Cashell explained that because of historic low interest rates, the refinance is estimated to net a possible savings of 12%, or $2,585,139, to district payers beginning in 2021.
“What we’re talking about here is an opportunity to save money for your taxpayers, plain and simple,” said Cashell, who has worked with the district for the past 20 years. “It’s easy to think along the lines of what you would do if you could refinance your mortgage for a lower rate, the difference is that bonds have some peculiarities that make it different from a typical mortgage.
“When bonds are issued, they have what is called a call date, meaning you can’t just pay them off at any time, only at the call date,” continued Cashell. “What we’re looking at here today is the bonds that were issued in 2014, which have a call date of December 2022. What we are looking to do is an advanced refunding, or refinancing these bonds prior to the call date.”
Cashell went on to explain that it only makes sense to refinance bonds when a district can see a 3-5% savings. With Defiance City Schools seeing the ability to see a possible 12% savings, Cashell said: “It’s absolutely worth doing.” He went on to explain that the refinancing is expected to be done by mid-March, however, if rates were to rise to a level in which the district wouldn’t see savings at that time, the transaction won’t take place.”
“What I want people to understand, is that refinancing does not put cash back into the pocket of the school district, all the benefits go to the taxpayers, who will play less tax each year through 2046 (the maturity date of the bonds),” said Cashell. “If the rates are where we need them to be, we expect a fast sale.”
Superintendent Bob Morton was not in attendance Wednesday evening due to being ill, so board president Cathy Davis shared Morton’s discussion items on the EdChoice Scholarship program, and a small revision on the 2021 school calendar.
Davis shared the Ohio House of Representatives, and the Ohio Senate, have given themselves 60 days to work out a plan when it comes to the program. It appears lawmakers in both chambers have agreed to change it to just an income-based program according to a poverty percentage, while dropping scholarship money for students who attend a failing school based on state assessments. The chambers haven’t agreed on that percentage, however.
A change in the school calendar, moving a teacher in-service day from Oct. 12 to Oct. 19, was approved due to fifth-graders attending camp.
Jay Jerger, Defiance High School principal, was in attendance to share with the board possible classes that could be offered to students in 2021, including four classes to help students develop leadership, explore different careers, be exposed to trades, as well as allow students to do internships. Other possible new classes could include anatomy and physiology II and journalism.
“This could open up several options for our students, but the additions will only happen if student interest warrants it,” said Jerger. “The workforce development classes, we’ve learned from Van Wert doing something very similar to this, have helped decrease discipline, and increased attendance. We definitely see the value in trying something new, so that we can find ways for our students to be successful beyond high school.”
In other business, the board:
• voted for the annual amounts and rates, as determined by the budget commission, to authorize the necessary tax levies and certify them to the Defiance County auditor.
• approved the transfer of $355,245 State Bank debt payment from the general fund, to special cost center general fund.
• okayed a medical leave of absence for Suzanne McGlaughlin from approximately Feb. 19-March 24.
• voted for maternity leave for Julie Hoffer from approximately April 1-May 27.
• approved the retirement of James Anderson, high school science teacher, effective May 29; the resignation of Mary Kasuga, Defiance Elementary gifted consultant, effective April 29; the retirement of Andrea Mouser, kinderstart teacher; and the employment of Jacob Green and Garrett Sierra as substitute teachers as needed for 2019-20.
• okayed the transfer of Cindy Rocha from high school server at 3.75 hours a day, to high school dishroom at 3.5 hours per day, effective Feb. 2; and the employment of Makayla Clellan, high school cashier, 3.5 hours per day; and Sarah Wolfrum, substitute aide/cafeteria/secretary as needed for 2019-20.
• voted for the updated list of substitute teachers from the NwOESC
• accepted the following donations: $25 from the Johns Manville Charitable Foundation for supplies for high school special education students; $200 from the Defiance Police Officers Association to the Defiance Elementary Amazing Shake competition; $300 from OAPSE toward the school cafeteria fund; $383.70 from Alexa Bickford to the girls tennis team to upgrade the city’s tennis courts as approved by the city.