R-5 school board rejects bond refinancing

During a meeting Wednesday night, the Nevada R-5 Board of Education considered refinancing the bonds issued by the district but Dr. Allan Crader and Heather Mudd of L.J. Hart and Company explained that the cost of doing so would be prohibitive. Instead, the two said a pre-payment of principal would save the district money without going to the expense of calling the current bonds and issuing new ones.

"We looked at this from two perspectives, on the one hand you could look at refinancing, issuing new bonds to completely pay off the old bonds to save money," Mudd said. "The downside of that is that you don't have very many total years to pay on this financing, it matures naturally in 2013. So we have a very short period of time and even though the interest rate drop is more than two percent, because we have a short period of time and a relatively small number of bonds affected you wouldn't save enough to justify having the attorneys prepare the legal documents and pay the underwriting firms to do the financing. The alternative is that you do what a person would do if they had a mortgage payment but found that they had a little bit more in the checking account than they needed - send a check to the mortgage company and tell them to pay off a little bit of principal. That's basically the concept we're looking at this evening."

The board voted to call in and prepay $125,000 of the bonds at the interest payment date of March 1, 2009 for the bonds that mature in 2012. The savings to the district would be $16,687.50 in future interest and there would be no cost for the pre-payment beyond the principal amount, which is owed in any case.

The board gave employees a single-provider option in the district's retirement plan through Edward Jones representatives Tom Hissink and Myles Miller. The option doesn't cost the district anything and provides employees a way to increase their retirement benefits by contributing to a 403(b) plan, which is similar to a 401(k) plan.

Another financial decision by the board increased the price of adult meals. The cost had been increasing and reached a point where the district was paying more for the adult breakfast and lunches than they charged the teachers. The board decided to raise the price of breakfast to $1.50 and the price of lunch to $2.50.

In other business the board approved a declaration of commitment to the A+ school program and a conflict of interest ordinance.