27:57One item at the meeting was the discussion of the recent bond transaction. The district managed to capitalize on positive market trends on May 6, achieving substantial savings despite the challenging economic climate. Initially, the district had anticipated around $20 million in net present value savings, but fluctuations in the market had tempered expectations to $15 million before the final decision. Ultimately, the transaction resulted in over $22 million in cash flow savings or $19 million in net present value savings, with a rate of 6.12%.

32:22This strategic timing and decision-making set a positive precedent in Florida’s market, as other districts followed suit. The bond transaction was oversubscribed by 3.81 times. The participation of retail investors, contributing approximately $3.4 million in orders, underscored the broad interest in the district’s financial offerings. Praise was directed toward the effectiveness of the underwriting team, particularly the advisory role of PFM and the collaborative efforts of co-managers.

17:53Following the bond discussion, the board turned its attention to the financial landscape and investment strategies. The portfolio, valued at approximately $3 billion, included cash, money markets, and securities. Despite a slight underperformance relative to the benchmark, attributed to a lower duration amidst declining yields and widening corporate spreads, interest earnings exceeded expectations. Earnings reached $87.6 million, surpassing the previous year’s $76.8 million, partly due to favorable securities rates and increased capital project activities.

23:32The board also discussed the local sales tax, which had exceeded projections, reaching $1.37 billion against an expected $1.345 billion. The county conducted public hearings on the transition from the current one-cent sales tax to a new half-cent tax beginning in January. This transition reflects a broader fiscal strategy, encompassing revenue collection and budget adjustments.

03:23In a presentation by a representative from PFM Asset Management, the economic outlook was examined, emphasizing the disconnect between hard economic data and sentiment surveys. The average effective tariff rate, historically around 2.5%, was projected to rise to approximately 20%, potentially impacting inflation and GDP negatively. Despite these challenges, a rebound was anticipated later in the year as tariff adjustments occurred.

13:19The representative also addressed the Federal Reserve’s projected actions, with expectations of reducing the federal funds rate by two cuts this year. Market speculation had suggested up to five cuts, but developments in trade tariffs between China and the United States revised expectations to one or two cuts. The school district’s investment strategy focused on higher credit quality, considering the widening corporate spreads and positive fixed income returns due to declining interest rates.

39:16Additionally, discussions touched on a term limit waiver for the chair position, with unanimous support for Mr. Miller’s continued leadership. A future meeting in August would address the election of the chair and vice-chair, as well as provide quarterly updates, including an overview of the capital plan. The prospect of future bond issuance was also considered, contingent on construction project readiness.