The Rio Rancho Public Schools Board of Education on July 14 authorized the issuance of $28 million in general obligation bonds voters approved in 2023 and asked state officials to set the district's debt-service property tax rate at $8.54.

Board members approved a delegation resolution that lets the superintendent and the finance director finalize bond terms within limits set by the board. "The issuance of these bonds will continue to maintain that tax rate," Eric Hagen of RBC Capital Markets told the board during a presentation on the district's finance plan.

Why it matters: The district said proceeds will fund unfinished construction and facility projects that have been harder to complete amid higher construction costs. Bond counsel Catherine McKinney of Modrall Sperling explained the resolution delegates authority to district staff to set final bond details within parameters: a maximum par amount of $28,000,000, a final maturity no later than Aug. 1, 2042, an interest rate cap to meet statutory limits, and a maximum underwriting discount of 3 percent.

Hagen presented the district's assessed-valuation history and projected roughly 5 percent growth for the upcoming tax year. He said the district typically pays down debt quickly, which allows layering future bond issues without raising the tax rate. "Given the current market, we anticipate the interest rate to be somewhere in the 3.5 to 3.8 percent range," Hagen said. He recommended a competitive sale but noted the resolution permits a negotiated sale if market volatility requires it.

Board action and timing: The board passed a separate resolution asking the Public Education Department and the Department of Finance and Administration to set the district's debt-service rate at $8.54. If the plan proceeds on the schedule Hagen outlined, staff will prepare an official statement in August, seek board approval of that document, and aim to sell bonds in early September with proceeds available on or about Oct. 1.

What officials said about use of proceeds: Superintendent Dr. Cleveland said the funds would help the district finish projects delayed or complicated by rising construction costs. "This is going to allow us to be able to finish some projects that we've not been able to do," Cleveland said, noting the district has struggled to meet prior commitments because of higher prices.

Discussion and process details: Catherine McKinney explained the difference between competitive and negotiated sales: a competitive sale invites bids from multiple firms and awards to the lowest bidder; a negotiated sale selects an underwriter ahead of time. The resolution approved by the board included both options to preserve flexibility.

Finances cited: Voters authorized up to $80 million in 2023; the district previously sold $20 million and plans this year to sell $28 million now, leaving $32 million to be sold later as needed.

Ending: The board voted to approve the bond authorization and the tax-rate resolution during the July 14 meeting; staff said they will return with the official offering documents for final approval before going to market.