School Board seeks help to invest sinking funds
The West Fargo School Board unanimously agreed Monday night to enter into a contract with Public Financial Management, Inc. (PFM) to create an investment vehicle for the district's QSCB (Qualified School Construction Bond) sinking funds.
The district will spend the next 15 years making yearly deposits to repay $5 million qualified school construction bonds, and will use PFM, more specifically their Asset Management group, to help determine if an investment strategy can be utilized to maximize interest earnings.
The engagement will cost the district $35,000 and is expected to be finished on Dec. 31, 2014.
A similar agreement was presented to the district over two years ago, but according to business manager Mark Lemer, the idea did not make as much sense fiscally as it does now.
"The problem was, at that time, the markets weren't resulting in the kind of interest rate yield that made sense for us to move forward, so they never pulled the trigger on formalizing that agreement," Lemer said. "With some of the recent movements in rates in the last six weeks, they are suggesting that there may come a time in the near future where this will make sense again."
The district is set to incur a net interest expense of roughly $278,500 with their QSCBs over the next 15 years. By investing its sinking funds with the help of PFM, the district believes it can reduce the amount they will pay for the principal portion of their debt from $5 million to between $3.4 and 3.7 million.
Also during Monday's meeting, the board's members of the newly reformed Long Range Facility Planning Committee announced they are looking into ways to finance the district's next school, since the 54th Street elementary school, as it is currently known, is projected to open at capacity in the fall of 2014.
The district is anticipating an elementary enrollment of roughly 4,400 students this year, and that number is expected to rise annually for the next five years.
The board is currently mulling the idea of asking voters to bond for yet another elementary school, with the possibility of pairing that request with that of a new indoor swimming pool or additional hockey rinks, both of which the district sorely needs.
In other action, the School Board's annual "reorganization" meeting saw no reorganization whatsoever, as Kay Kiefer and Patti Stedman were both unanimously re-elected to their posts as board president and vice president, respectively. No other nominations were brought forth.