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KHS Building Corp. OKs Refinancing
April 22, 2009 - The Knightstown High School Building Corporation passed a resolution last week that will allow the refinancing of debt on that school.
The resolution, approved at a special meeting April 14, permits the issuance of new bonds -- a process called "refunding" -- once interest rates are at a level that will give CAB a net savings of at least $100,000. The Charles A. Beard School Board passed a similar resolution in September.
By refinancing the bonds, CAB will get access to $1.265 million that it could use to address some of the school corporation's current facility needs. This money is now being held in a sinking fund, serving as security for outstanding bonds, and is only available to pay off the original bond issue a little early.
In their vote approving the resolution, KHSBC members also said they favored a refinancing option that would extend the repayment period of the bonds - now due in 2022 - another two years. According to the school corporation's financial consultant, that could, depending on interest rates, give CAB access to another $800,000 or more that could be used for projects at KHS or CAB's other buildings.
A proposed timeline on the refinancing, prepared by Jane Herndon, the Indianapolis attorney serving as CAB's bond counsel, shows the KHSBC and school board both taking further action on this matter before the end of the month. Both bodies will be required to approve an amendment to a lease that exists between the KHSBC and CAB.
Before the school board can approve an amendment to the lease with the KHSBC, a public hearing will have to be held. According to the timeline, this hearing would be held in early June.
After the hearing, if its members still favor moving forward, the school board would have to approve a resolution authorizing the lease with KHSBC to be amended. Then, in the days that follow, the new bonds would be issued, with closing expected to take place before the end of June.
In other business, KHSBC members also voted last week to install new officers. Jeff Weiland, who had been vice president, was chosen as president, and Tim Sorrell and Cindy Huffman were selected, respectively, as the vice president and secretary-treasurer. Member Janet Buckles will serve as the assistant secretary-treasurer.
Selection of officers is a task that is supposed to be carried out yearly by the KHSBC, a nonprofit entity formed in 2001 to oversee construction and financing of the new high school. However, in violation of its own bylaws, the KHSBC had not, before convening last month to consider the refinancing issue, met since the fall of 2004.
Two of the KHSBC's seven members, Rob Winters and Greg Stolle, did not attend last week's meeting. Winters is an original member of the KHSBC, while Stolle, along with Sorrell and John Means, had just been appointed in late March to fill vacancies on the building corporation.
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