Board hears bond-financing options; tables contract reviews and approves a construction addendum
Summary
Finance advisers outlined two bond-schedule options (illustrative voted amounts of $46.94M and $51.2M with differing net project proceeds), explained series bonds and lease-purchase interim financing, and estimated a 15-year schedule at an illustrative 5.5% interim rate. The board voted to table some contract items to Jan. 6 and approved a contract addendum from Kyler Construction.
Financial advisers presented two illustrative bond-financing options and explained how the district could structure a series bond program and interim lease-purchase financing so construction can begin sooner while staying within legal bonding capacity.
Andy Davis of Steven Smith Corporation told the board the ballot must list the full voted amount (he cited $46,940,000 in his example) while the district’s net expendable dollars for projects are smaller after issuance costs (he cited a net estimate of about $32,340,000 for that scenario). ‘‘We’re gonna vote 46,940,000,’’ Davis said, ‘‘that’s the only number that’s on any official documents as far as what goes on the ballot…’’
Davis described the common approach of approving a large total amount and selling portions over multiple years (a series bond) so annual sales do not exceed statutory bonding capacity. He explained that lease-purchase or bank financing can be used to bridge timing so work can proceed immediately; he used an illustrative interim interest assumption of about 5.5 percent for that lease-purchase in the worked example and said actual bond sale rates may vary and are often lower.
The presentation included a second scenario with a slightly higher millage (for example, moving from 20 to 22 mills), which Davis said would increase the district’s voted amount in the example to about $51,200,000 and raise the net available funds modestly (presenter cited about $35.3 million net in that scenario). He cautioned that all numbers and tax impacts depend on final project lists, election outcomes and market rates at sale.
On contracts and fees, the board heard that the construction-manager fee had been reduced from 6 percent to 5 percent to preserve additional project dollars. Later in the meeting a board member asked for more time to review contract materials and moved to table the contracts until the district’s January meeting; the motion carried on a roll-call vote recorded as: Hanson — Yes; Kane — Yes; McDermott — Yes; Pingleton — Yes; Barton — Yes.
In a separate vote on Item 6 the board approved a contract addendum from Kyler Construction related to the bond construction project; roll-call votes were recorded as affirmative for Kane, McDermott, Pingleton, Barton and Hanson.
Advisers and board members agreed that final numbers and tax impacts will be updated as estimates are refined and as market conditions become clearer before any ballot commitment.
