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Baird outlines referendum financing plan, timeline and tax projection for John Long Middle School project
Summary
Mike Clark of Baird told the Grafton School Board the district’s referendum borrowing will match current debt terms, include a rating call next week, target a May 20 sale and June 10 funding receipt, and that a conservative 3.99% rate yields a modest tax impact in the presented model.
Mike Clark, a Baird representative, briefed the Grafton School Board on April 22 about the financing plan for the district’s recently approved John Long Middle School referendum project.
Clark said the proposed borrowing is structured to match the district’s existing debt schedule so it will not extend the repayment period. He described a near-term schedule that includes a rating call, presale marketing in mid-May, an anticipated sale of the notes on May 20 and expected receipt of funds on June 10. Clark described disclosure counsel and the routine checks done to ensure sales documents are accurate.
Using a conservative 3.99% interest-rate assumption in the scenario he presented (the referendum process previously used 5%), Clark said the modeled tax impact would be modest and, under the assumptions shown, could result in the tax rate being down roughly $0.41. He cautioned that the final tax impact depends on the interest rate at sale and local valuation growth; his model used a conservative 1% property value growth assumption.
Clark also walked through how the structure aims to maximize state aid by aligning expenditure years with the district’s existing debt schedule, explained the district’s ability to spread borrowing into multiple pieces if needed, and noted federal rules on spend-down and arbitrage (5% spent in six months; balance within three years) that affect timing of expenditures and earnings on bond proceeds.
The board treated Clark’s presentation as informational; staff said the agenda language and sale timeline will be brought back for formal action in May and related approvals may be requested at the May and June meetings.
