The Iowa City School Board held a meeting on May 13, 2025, focusing on the district's financial strategies, particularly regarding SAVE (Secure an Advanced Vision for Education) revenue bonds and future borrowing capacities. The discussion highlighted the current obligations and projected financial landscape for the district.

As of now, the district has $147 million in principal owed on existing SAVE revenue bonds, with total repayments, including interest, expected to reach $185 million by fiscal year 2039. Approximately 75-80% of the district's SAVE revenues are currently allocated to debt service, which amounts to about $14.2 million annually. This figure is projected to remain flat through fiscal year 2043, although future increases in sales tax revenues could allow for additional borrowing.

The board discussed the potential to borrow up to $127 million in principal by fiscal year 2048, contingent on maintaining the current payment structure. This borrowing capacity is essential for funding the district's Facility Master Plan (FMP) 2.2. However, the board acknowledged that alternative funding sources, such as PPEL (Physical Plant and Equipment Levy) revenue bonds or general obligation bonds, could also be explored.

The meeting also addressed the statutory limits on borrowing, which have increased due to property valuation growth in Iowa. The district's remaining borrowing capacity is currently estimated at $430 million, with projections indicating continued growth. The board emphasized the importance of strategic project timing and interest rate management to optimize borrowing efficiency.

In response to questions about tax compliance and interest rates, the district confirmed that it engages an external firm to ensure adherence to regulations regarding bond proceeds. The current bond rating stands at AA, indicating a stable financial outlook.

Overall, the discussions underscored the district's commitment to managing its debt responsibly while planning for future educational infrastructure needs. The board will continue to evaluate its financial strategies to ensure the sustainability of its programs and projects.