East Penn to Save About $1 Million With Bond Refinancing

Members of the East Penn Board of School Directors learned at the board’s July 9 meeting that will save just over $1 million in interest payments on a nearly $10 million bond refinancing.

The refinancing was conducted via online auction through Public Financial Management, of Harrisburg. Ryan Brockman, of PFM, told the board that the auction was one for the record books, bringing in 149 bids, the most PFM has ever received. The winning bidder, FTN Financial of Memphis, Tenn., bid 49 times.

According to Brockman, the district will save $582,000 in 2013-2014, $531,000 in 2014-2015 and $53,000 in 2015-2016.

The news about the bond refinancing came on the heels of the public comment portion of the meeting, which brought out about ½ dozen people .

After Brockman’s presentation, School Board President Charles Ballard emphasized that one of the key reasons East Penn School District does so well in the bond market is because it has earned a very strong AA2 rating from Moody's Investors Service.

And, one of they main reasons East Penn maintains its AA2 rating, he said, relates to the health of its fund balance and the health of its financial reserves.

School director Lynn Donches asked Brockman, “How much do we have to have in the current fund balance to keep our rating, or how much more would we have to put into it to go up to the next level?”

In response, Brockman said: “The simple answer is there is no simple answer.”