It will be financially advantageous for Sibley East Public School to borrow money this year.
The Board of Education, last week, accepted a bid from Wells Fargo Brokerage Services, LLC of Minneapolis to provide $1,030,000 general obligation aid anticipation certificates of indebtedness. The net interest rate is 3.933%.
Sibley East has used aid anticipation certificates the past few years in order to help the district with cash flow. This year, Sibley East will be able to invest the funds at a higher rate of interest than what the district is borrowing the funds for. Betsy Knoche of Ehlers and Associates, the school district’s financial advisor, said that the investment rate in the school district liquid asset fund, as of last week, was 5.08%.
Knoche also noted that Sibley East has a favorable credit rating.
This is the second consecutive year that Sibley East has been able to earn a higher rate of interest on the aid anticipation certificates than what will need to be repaid, Superintendent John Langenbrunner said.