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Refinancing school bonds saves Lanesville money

The Lanesville school board and the Lanesville School Building Corp. signed papers refinancing their school’s almost $6 million building debt and saved the school district $278,969, during their meeting Thursday evening.
The refinance was completed with the help of Bill Thomas, an investment representative with Edward Jones in Corydon who suggested refinancing the debt at this time.
The school board had been originally told that refinancing the school’s building debt could save Lanesville taxpayers about $140,000.
Peter Schickel, treasurer of the building corporation, who celebrated by wearing green pants and a red golf shirt Friday, said, “It’s Christmas in July in Lanesville,” referring to the refinancing which was agreed upon shortly after noon on Wednesday, July 31.
Schickel said he was contacted in May about refinancing the school debt by Thomas, who, with Chris Collier, a bond counselor in Edward Jones’ St. Louis office, were watching the school’s account, with an eye on refinancing the debt and saving the town some money.
“Thomas told me that now might be a good time for the school to proceed with refinancing because the interest rates were low and in our favor,” Schickel said. “He said we might be able to save the town some money.”
Schickel and Thomas pitched the refinancing idea to the school board at a Saturday morning meeting and again by Schickel at a regular school board meeting.
After doing some research, board president Donald Hussung agreed that if the school could be sure of saving at least $100,000, it would be worth pursuing refinancing.
“We were hoping to save the town some money and are really glad we were able to save as much money as we did,” Hussung said. “I was pleasantly surprised when I saw the final numbers.”
“Their timing was perfect,” said Thomas, who had helped the Lanesville schools with financing nine years ago. “They refinanced at the most opportune time possible for the greatest savings. The interest rates were at the low end, and we’re pleased with the final numbers.
“The $278,000 savings is the present value savings but the actual savings over the 14-year life of the new bond issue will actually be about $350,000,” Thomas said. “The bonds that the school issued nine years ago were at a 5.6-percent interest rate. The new rate is 3.82 percent.”
Supt. Phil Partenheimer said he was happy with the savings even though it cost the school $97,000 to refinance the debt.
“While we increased the debt from about $5.9 million to about $6.15 million, we reduced the interest rate and the term to produce a savings,” Partenheimer said. “Part of the cost of refinancing the debt was the cost of purchasing insurance on our bonds, which we did not have before, and improved the school’s bond rating from an A rating to a AAA rating, and that helped us save even more money.
“The timing was good because the interest rates have remained low and investors are moving more to bonds right now,” Partenheimer said. “This refinance should be good news for Lanesville taxpayers.”
In other business, the school board approved hiring Lana Dougherty as a school counselor. She was an elementary school counselor in the South Harrison Community School Corp. last year, but, due to budget constraints, was slated to teach gym this year.
Matt Kellums was hired as a social studies teacher.