Port Angeles board approves $30 million bond sale authorization, extends capital fund to begin construction

Port Angeles School District board members on March 27 authorized the sale of the district's first series of voter-approved general obligation bonds and approved a separate capital-fund extension to allow construction work to begin.

The board approved a bond delegation resolution authorizing up to $30,000,000 in bonds as the first series of a voter-approved $140,000,000 package, and separately approved Resolution 2425-10 to extend the district's capital projects budget by $11,500,000, increasing the fiscal-year allocation from $5,500,000 to $17,000,000 so contractors can be paid when work begins this spring and summer.

The bond resolution delegates limited authority to district officials — the superintendent and the secretary/finance officer — to approve the final bond sale within parameters set by the board, including a maximum interest rate, a maximum 21-year term and sale-price limits. Bond counsel and district staff told the board the delegation process is standard and allows the district to complete a sale and close promptly if market conditions meet the parameters set by the board.

"The voters approved a total of $140,000,000 of bonds. This is the first series to get started on the projects," bond counsel Lee Marchezo told the board, noting the move follows strong voter support. Marchezo explained the board's resolution limits the first series to $30,000,000 and requires district compliance with federal tax and securities rules so the bonds may be issued tax-exempt. He also explained the district may participate in the state's bond guarantee program to obtain the state's higher credit rating for the sale.

Superintendent Marty Brewer told the board the district plans two bond sales under the current schedule: the $30,000,000 sale in May to fund preconstruction testing, site work and early planning and a second sale about 18 months later for the remaining construction work. "We're going to do two sales, at least at this stage," Brewer said, and noted the approach aims to avoid holding all bond proceeds unused while projects are still in design.

On the capital fund extension, Chief Financial Officer Karen Casey and Brewer explained the district had budgeted $5.5 million for capital expenditures this fiscal year but will begin paying contractors in May and exceed that budget. Casey said the capital projects fund already contains the money; the extension moves collected dollars into this fiscal year in order to begin work sooner. "This is money we already, just so people are clear, already have. It's just being shifted a year earlier," Casey said during the public hearing earlier in the meeting.

The board's motion to approve the bond resolution and the capital-fund extension were moved, seconded and approved by the members present. Two directors were absent for the meeting; board members recorded the votes as "Aye" and the chair announced the measures approved. The bond resolution includes a delegation that requires the sale to meet the board-set parameters on the sale date; if market terms exceed those parameters the sale would not go forward without returning to the board.

The district plans a ceremonial groundbreaking for Stevens Middle School on April 12; Superintendent Brewer said the May bond sale will provide money to begin testing and early civil work so contractors can mobilize without incurring additional escalation costs by delaying until fall.

What the board approved

- Bond delegation resolution (Resolution 2425-09): Authorizes the issuance of up to $30,000,000 as the first series of bonds from the voter-approved $140,000,000 package, delegates sale approval to district officials within parameters (maximum interest rate, maximum 21-year term, price limits). District counsel emphasized compliance with federal tax and securities law and participation in the state bond guarantee program.

- Capital Fund Extension (Resolution 2425-10): Increases this fiscal year's capital projects budget from $5,500,000 by $11,500,000 to a total of $17,000,000 so the district can pay contractors in May and begin planned construction.

Ending: The board and staff said they expect to return to the board when the second bond sale is scheduled; staff described the May sale as the first step to move construction into the field and avoid escalation costs from waiting until fall.