COPs refunding to save Mehlville taxpayers $2.5 million

Board votes 4-2 to increase tuition for all-day kindergarten.

By EVAN YOUNG

A resolution authorizing the issuance of bond-like certificates of participation to refund certificates issued in 2001 was approved last week by the Mehlville Board of Education.

The board voted unanimously Nov. 18 to authorize the refinancing, a move school district officials expect will save taxpayers roughly $2.5 million in interest payments over the next decade.

The district wants to prepay nearly $21 million of the $36.9 million in certificates of participation, or COPs, issued in February 2001.

The notes were issued to fund the first phase of Mehlville’s Proposition P districtwide building improvement program, which voters approved in November 2000.

The 2001 COP issue is callable, or refundable, after March 1, 2011. Mehlville will enjoy an annual interest savings of roughly $250,000 over the next 10 years by issuing new certificates at a lower borrowing rate, according to Chief Financial Officer Noel Knobloch. He estimated the borrowing rate has decreased by 1 percent to 1.5 percent since the COPs first were issued.

“Obviously this is subject to the final rates which will be determined when the bonds are priced, which we anticipate on Dec. 9. So it’s a pretty quick turnaround,” Knobloch told the board last week.

The resolution names Chesterfield-based L.J. Hart & Co. as the district’s underwriter for the transaction. Gilmore & Bell will serve as bond counsel.

“We’re always looking for ways to save, and we’re fortunate to be able to call these in March and exact some savings,” Superintendent Terry Noble told the Call. “That’s something we’re always looking to do. We keep a close watch for those opportunities … Interest rates are really favorable right now.”

In other business last week:

• The board voted unanimously to accept the district’s annual audit.

Al Kirchhofer Jr. of Daniel Jones & Associates certified public accountants said Mehlville received an unqualified opinion on its financial statements for the fiscal year ending June 30, 2010 — the highest opinion available.

“In education terms, you got an A-plus,” Kirchoffer told the board.

Missouri school districts are required to have audits performed every other year, but Mehlville has its financial statements audited annually. The district paid Daniel Jones & Associates $11,725 for the fiscal 2010 audit, the same amount it paid the firm to audit its financial statements for fiscal 2009.

• The board voted 4-2 to increase full-day kindergarten tuition by 3.4 percent for the 2011-2012 school year. Board member Micheal Ocello and Vice President Venki Palamand were opposed.

Full-day kindergarten tuition will increase next year to $2,275 from the current rate of $2,200. Knobloch said the increase will generate between $15,000 and $20,000 in additional revenue for the district.

The rate had been unchanged since the 2009-2010 school year, when board members voted to raise it by roughly 10 percent, from $2,006 to $2,200. Before that increase, the rate had been unchanged for three years.

Knobloch told the board the 2011-2012 tuition increase was not in response to voter rejection of Proposition C earlier this month. The proposed 88-cent tax-rate increase would’ve funded a free full-day kindergarten program. Rather, next year’s rate increase is designed to keep up with inflation, Knobloch said.

Ocello suggested the board consider a increase greater than $75, such as $100 or $125. The additional revenue wouldn’t make a huge difference, Ocello said, but added, “I think the community has said: ‘Tighten your belts, figure out how to do more with less.”’

Knobloch cautioned against increasing the rate too high because the program could end up losing pupils and, in turn, revenue.

Mehlville currently has an estimated 275 to 300 pupils enrolled in its full-day kindergarten program.