AYER -- Ayer Shirley Regional School District Finance Director Evan Katz shared some very good news with the School Committee on Tuesday night.
Katz reported that on Jan. 3, the Municipal Finance Oversight Board voted to approve ASRSD's participation in the State Qualified Bond Program under Chapter 44a.
The SQB is designed to provide state assistance to distressed Massachusetts cities, towns, and regional school districts to efficiently access capital markets for their borrowings. The provides a one-notch lower rating to that of the commonwealth.
That means that the $19-plus million in high school renovation project bonds will have the state's higher debt rating, supporting the region's debt," said Katz.
According to Katz, Peter Frazier of First Southwest, the district's financial advisor, told the MFOB at the meeting that the savings for Ayer-Shirley would be in the $1 million to $2.8 million range over the life of the loan.
"This is about three percent to 10 percent of projected debt service payments, which are projected to be about $29 million in debt payments over the next 20 or so years," said Katz. "Just taking advantage of the state's bond rating we were able to get a substantial savings."
"Our conservative interest rate when we made projections will show a bigger gap as we go forward in this project," he later added.
The borrowing will take place on January 16, and on January 23 the school committee will sign the borrowing documents.
"In July is when we will borrow our next large amount of money, and we will sit down with the towns and Southwest and have a strategy session," said Katz.
"There may be advantages over interest rates if they stay low. That means overall borrowing costs would be less because we would pay less interest and we could potentially structure our payments around that to reduce costs even more. We will work with the towns over the next few moths to come up with a plan," he concluded.
"I think it's a great opportunity to work with the finance committees on this," commented ASRSD Superintendent Carl Mock.
School Committee Vice Chairman Pat Kelly said that having the School Committee, selectmen, and finance committees working together as a team would "save us about a half a million dollars."