Linn‑Mar approves $10 million bond sale, authorizes up to $31 million in sales‑tax bonds for indoor activity center

The Linn‑Mar Community School District Board of Directors voted unanimously on motions to accept a $10,000,000 sales‑tax revenue bond bid and to approve a resolution authorizing issuance of approximately $31,000,000 in school infrastructure sales, services and use tax revenue bonds to fund expansion, renovation and furnishing of an indoor activity center.

The actions matter because the sales‑tax bonds are the primary funding vehicle the district is using to complete the indoor activity center project now under way, and board members were shown how the new issue fits with the district’s existing sales‑tax debt and its 10‑year facilities planning.

Piper Sandler financial advisor Matt Gillespie reviewed the sale results for the board and described the winning bid, the structure of proceeds and the debt service plan. He noted the winning underwriter was BOK Financial Securities and that the winning bid used bond insurance from Assured Guaranty, which resulted in an insured rating two notches above the district’s standalone rating. “I just wanna congratulate the district on this facility,” Gillespie said, calling the performance venue a “very nice addition to your community.”

Gillespie told the board six bids were received and the winning bid’s weighted average true interest cost (including underwriting discount and any premium) was 4.2856. The bid produced a premium of $70,081; the total par amount was $10,000,000 and the net proceeds available from this sale (bond proceeds only) were shown as $8,790,000 on the district’s worksheet. The district will set aside a $1,000,000 debt service reserve fund from the sale proceeds “as a safety net,” Gillespie said; the reserve is district funds that will be returned at final payoff and may earn interest while held.

Gillespie reviewed the amortization schedule the district received: semiannual interest payments with annual principal repayment extending through fiscal 2038, and a call date that allows the district to refinance beginning in February 2030. He also showed a coverage analysis combining existing sales‑tax bonds with today’s sale; the board uses a 1.25 coverage factor for sales‑tax debt before approving additional borrowing. Gillespie said the bond structure purposely left room in the near‑term principal schedule so future bond sales could amortize more principal early and save interest costs.

Board members asked about market conditions and the number of bidders. Gillespie said Linn‑Mar typically attracts more bidders than many Iowa districts and that market volatility in the prior weeks had produced materially higher yields for some issuers; he added that conditions had moderated by the sale date. “I’m thankful that they are where they are right now,” he told the board.

Procedural steps and votes: the board voted by roll call to accept the lowest bidder for the May sale and then approved a separate resolution authorizing issuance of approximately $31,000,000 for the indoor activity center. The sale required a good‑faith deposit from the winning bidder (a $100,000 wire was received) and a scheduled closing date in late June. Matt Gillespie said the transaction timeline called for the board to approve legal documents at the June meeting and close the transaction on June 24.

The board’s packet included the Standard & Poor’s rating report referenced by Gillespie; the rating report summarized district enrollment trends, state economic context and stress scenarios used by the rating agency. Gillespie and board members noted the rating context was helpful when comparing relative yields and investor demand.

The board president called for roll calls on both motions; both motions carried with seven yes votes and no noes recorded.

The district staff and finance committee said the sale proceeds will be combined with prior bond proceeds and other cash to finish the performance venue and to fund the indoor activity center work detailed in the revenue purpose statement the board approved. Additional planning items — including the district’s 10‑year facilities plan and the formation of a facility advisory committee — remain underway and will be used to prioritize future projects and any subsequent bond issues.

Looking ahead, the district will complete the bond closing in June and begin using the proceeds for the currently authorized construction, furnishing and related costs. Board members and staff said they expect additional public and committee discussion as the district refines the 10‑year facilities plan and considers future capital projects.