School board watching bills in Pierre


Board votes to refund certificates, potentially saving nearly $900K

BROOKINGS – Brookings School District Superintendent Klint Willert offered the school board an update last week on legislation that could affect the state’s school districts.

The board also approved the refunding of capital outlay certificates used to fund the middle school addition, a move that could save the district nearly $900,000.

Willert expressed concerns about Senate Bill 177, to “revise the provisions of parental choice regarding compulsory school attendance and matters ancillary thereto.” 

The bill would create an easier path for students to move to home schooling and would allow them to participate in any interscholastic activity sponsored by the South Dakota High School Activities Association. The bill has passed in the Senate on a 21-14 vote and has been schedule for a hearing Monday in House State Affairs.

“This bill has, from my perspective, some real slippery slopes in it that tie back to, I believe, some mixed messaging. We recently changed the compulsory age of education in South Dakota to 18, but then we turn around and we’re going to reduce requirements for individuals to homeschool. In Brookings this has not been a significant issue. In other school districts and other communities, it’s a very big issue,” Willert said. 

“More students are opting, when they have failing grades, to all of a sudden homeschool and then turn around and participate on an athletic team or an activity and it becomes then a question of fairness and equity because the standard is not the same,” he added.

“Effectively, Senate Bill 177 does create a pathway for legalized dropout, because there’s no accountability – absolutely nothing. No assessments, one-time notifications, and then we’ll never hear from the families again. And it is simply a notification, there would be no intervention from the school district or the Department of Education if there are questions on academic performance or achievement. … I also see it as a child protection issue,” Willert said.

Willert also spoke on House Bill 1279, which appropriates $900,000 to the Department of Education “to develop a K-12 civics and history curriculum to include investing in educational materials for history and government, training for schools and educators, teacher professional development, and South Dakota instructional materials.”

Willert said “the devil is in the details, and that question is: who writes those standards? And who’s at the table when it comes time to write the actual curriculum, and how will that curriculum be represented for the state of South Dakota going forward.” 

The bill passed in the state House of Representatives, 63-5, last Tuesday and is schedule for hearing in Senate Appropriations this Tuesday.

The superintendent also said he’s watching issues related to marijuana.

“It may have some local policy decisions that our board will want to grapple with, and that ties back to our student handbooks and will we want to continue to have, for example, an open campus if we start seeing a dispensary or some opportunities for students to access recreational marijuana during the middle of the school day?” Willert asked. 

“And there are some questions about the use of medical marijuana in schools and how that gets managed as well, and I envision that there will be some work done that will handle that similar to like epi-pens. There is some question, though, should even happen in schools, and then what does that mean for our nurses as the people that would ultimately be expected to dispense medical marijuana to students.”

One action item of the evening was in regard to refunding 2018 capital outlay certificates that were used for the Mickelson Middle School addition. The savings from refunding the certificates could amount to nearly $900,000.

“We have the opportunity to advance refund our 2018 middle school capital outlay certificates, and right now they’re looking at two options – both of them are going to save us money – and part of this resolution authorizes us to take advantage of either option, which ever one saves us the most money. The total savings potentially are between $887,000 over the life of the capital outlay certificates or around $894,000, and the advance refunding it would be a taxable advance refunding,” Director of Business Services Brian Lueders said. “Normally the savings aren’t there through a tax refunding, but with the market in the way it is, it’s an awesome chance for the school district to save some money by advance refunding these certificates.”

According to the documents attached to the agenda: “An advance refunding transaction takes advantage of a low interest rate environment through the issuance of refunding securities well in advance of the redemption date for the securities to be refunded. 

“In our case, the district would issue refunding certificates in 2021 to advance refund all or a portion of the 2018 callable maturities, which have a redemption date of Aug. 1, 2025. 

“The net proceeds of the refunding certificates are used to purchase U.S. Government Securities, which are then held in an escrow account and liquidated as needed to pay the interest on the refunded certificates until the redemption date of the refunded certificates on Aug. 1, 2025, at which time the refunded 2018 maturities are paid off with the funds generated through the liquidation of the remaining U.S. Treasury securities held in the escrow account. 

“This structure allows for lower payments from the lower interest rates on the refunding certificates, which generates the interest cost savings from the refunding transaction,” the agenda attachment says.

The district has the chance to refund just under $18 million of the Series 2018 Certificates. The resolution authorizing the execution, terms, issuance, sale and payment of Taxable Limited Tax Capital Outlay Refunding Certificates, Series 2021,  received unanimous approval.

To watch the meeting, visit https://www.youtube.com/watch?v=QYZXMixssFM.

Contact Matthew Rhodes at [email protected]

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