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Brainerd Public Schools: Board agrees to issue, refund bonds

Marci Lord, director of business services, and Greg Crowe, a municipal adviser with Ehlers Inc., discuss bonding Monday, Oct. 8, during the Brainerd School Board meeting at the Washington Educational Services Building. Theresa Bourke / Brainerd Dispatch

Bond issuing and refunding took center stage at the Brainerd School Board's Monday, Oct. 8, meeting.

Director of Business Services Marci Lord and Greg Crowe, a municipal adviser with Ehlers Inc., walked board members through the sale process for post-employment benefits, referred to as OPEB, refunding bonds and building refunding bonds.

The OPEB bonds were originally issued for $22,915,000 in 2009 to pay post-employment benefits to district employees after their termination of service, and Lord said the district is looking to refund them right now for $9,470,000. The current bonds have interest rates between 4.6-5 percent, but Crowe estimates the new refunding bonds to have rates around 2.85-3.15 percent, which would reduce the district's future debt services payments by more than $300,000 between 2020-2023.

The building bonds were originally issued for $49,970,000 in 2010 with an interest rate of 4 percent. With interest rates around 3-4 percent for the refunded bonds, Crowe said debt services payments will decrease "significantly" between 2020-2023.

The district is also set to issue about $14,830,000 in new general obligation facilities maintenance bonds to fund projects in the district's 10-year facility maintenance plan.

On Nov. 14—the day of sale—Lord, along with Superintendent Laine Larson and a school board representative, will receive proposals and accept the lowest bids. The board will then ratify that acceptance its next meeting Nov. 26.