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SWTC Board approves sale of notes
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The Southwest Wisconsin Technical College District Board approved a resolution awarding the sale of $2,500,000 general obligation promissory notes during its annual meeting Monday evening, July 9.
John Mehan, managing director with Robert W. Baird & Company, briefed the board on the bids received.
“I’m pleased to report you had a great turnout,” Mehan said. “We had a lot of participation, seven bidders and it was all electronic.
“From one to the next, they were pretty darn close.”
United Missouri Bank was awarded the bid with a true interest cost of 0.8633 percent.
“Why does United Missouri Bank care about a technical college,” Mehan asked rhetorically. “You’re Aa2, $500,000 block size, bank-qualified...that is what they are looking for.”
Aa2 refers to SWTC’s Moody’s Investor Service credit rating. Moody’s identified SWTC’s strengths as stable financial operations characterized by strong reserve levels and additional liquidity available from enterprise fund balance.
“The district’s healthy financial operations are expected to remain stable due to conservative financial management that has resulted in strong reserve levels and alternate liquidity available to the district,” Moody’s report stated. “Following moderate draws on reserves from fiscal 2005 through fiscal 2008 due to negative budget variances, the district modified its budgetary assumptions to enact more conservative projections leading to a $363,000 operating surplus in fiscal 2009.
“In fiscal 2010, the district experienced a $862,000 General Fund surplus, bringing General Fund reserves to $4.7 million, or a strong 21.2 percent of revenues.”
“You are who you are and Aa2 is an excellent rating,” Mehan said. “You’re not in trouble, you’re not at risk.”
Up to $150,000 will be authorized for paying the cost of site improvements; $1,032,000 for the public purpose of paying the cost of building remodeling and improvement projects; and up to $1,318,000 for paying the cost of acquiring moveable equipment.
The first interest payment is due June 1, 2013. Over the life of the primissory notes, SWTC will pay $62,500 in interest.
“That’s pretty amazing to borrow half a million dollars for five years and pay $62,000 in interest,” board member Donald Tuescher said.
In other action, the board:
• approved a three-year facilities plan (2012-2015). Each fiscal year of the facilities plan prioritizes funds for remodeling, planning and capital improvements.
The 2012-2013 plan includes a total of $1,525,486 ($1,237,486 in remodeling costs, $88,000 in planning costs and $200,000 in capital improvements). The 2013-2014 plan includes $986,000 ($886,000 in remodeling costs and $100,000 in capital improvements). The 2014-2015 plan includes $1,388,000, all in remodeling costs.
• approved the hiring of Mary Hudson and Joshua Klass as electromechanical technology instructors.
“There is plenty of work in that subject area,” SWTC President Duane Ford said.
• designated Citizen’s Bank as SWTC’s official depository for the 2012-2013 fiscal year. Vice President/Administrative Services Caleb White noted six bids were received.
• retained Eileen Brownlee of Kramer & Brownlee as general legal council. The board also retained Jon Anderson of Godfrey & Kahn for labor relations.
• elected James Kohlenberg as chairperson, Eileen Nickels as vice chairperson, Melissa Fitzsimons as secretary and Rhonda Sutton as treasurer for the 2012-2013 fiscal year.