July 2012
Inside The Advisor
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Greetings!

 

Schools may be out for summer, but refundings, cashflow shortfalls and post-issuance compliance responsibilities don't take breaks, as reflected in the July articles of The Advisor.  

We also are making you aware that the deadline to call for a November election is August 24, 2012.

 

Steve Apfelbacher 

Steve Apfelbacher

President and CEO

[email protected]

 

When is Saving Money Not a Good Idea?

The Pros and Cons of Advance Refundings

by Joel Sutter, Financial Advisor

 

joel sutter When I was a new financial advisor at Ehlers 15 years ago, I called a friend who was a very smart and experienced school business official. I started my conversation by saying, "how would you like to be a big hero in your school district and save the taxpayers a million dollars by refunding your building bonds?" My friend actually laughed at me and said something like, "I think I'll wait a few years until we can save a lot more money."

 

We continued to monitor this issue as rates went up and down. Less than two years later we were able to refund those same bonds and save the district's taxpayers over $4 million.

 

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Planning Ahead for Cash Flow Shortfalls 

by Jeff Seeley, Financial Advisor

 

Jeff Seeley As a school district administrator, one of the worst feelings you can experience is worrying about whether you will have enough cash in the bank to cover payroll and other critical bills.  

 

Due to the State's continuing delays in state aid payments, many school districts will experience cash flow shortfalls some time in the next year.  

 

In most cases, the largest cash shortfalls will occur during the summer months. The best solution may be to issue Aid Anticipation Certificates (AACs).  

 

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Deadline to Call for a November Election is Approaching Fast

by Gary Olsen, Financial Advisor

 

Gary Olsen The deadline for a district to schedule any kind of referendum (operating referendum, bond issue, or capital projects levy) in November is August 24, 2012 (74 days prior to the election).  

 

By that date the board must adopt a resolution calling for the election and notify the Commissioner of Education and the County Auditor of each county in which the school district is located of the question to be voted on.

 

If you are considering any kind of a referendum for this fall, we want to make sure you are aware that Ehlers provides a variety of services to help you - not only with bond issues but also with operating referendums and capital projects levies.


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Has the School Board Adopted a Post-Issuance Debt Compliance Policy?

by Jodie Zesbaugh, Financial Advisor

 

jodie zesbaugh Over the last two to three years, the IRS has increased its efforts to enforce federal rules related to tax-exempt debt.  

 

Their efforts have focused on "post-issuance compliance" with rules related to arbitrage, use of proceeds, reimbursement of prior expenditures, and related topics.  

 

The IRS has urged that all issuers of tax-exempt debt (including school districts) have written procedures regarding compliance with federal rules.

 

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 The Ehlers Education Team
The Ehlers Education Team includes seven financial advisors - Joel Sutter, Carolyn Drude, Gary Olsen, Betsy Knoche, Tom Berge, Jeff Seeley, and Jodie Zesbaugh - who specialize in assisting Minnesota school districts. These individuals have a combined total of over 200 years' experience with Minnesota school finance - including experience working for state agencies, the Legislature, Counties, and school districts. We bring the lessons learned from this experience to benefit your District.

 

 

 

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