School board authorizes up to $113.6M in new bonds, refunds 2015 debt to save taxpayer dollars

The School District 27J Board of Education on April 22 adopted a parameters resolution allowing the district to issue two series of general obligation bonds: up to $113,585,000 of 2026A bonds under the districts 2021 authorization and up to $149,365,000 of 2026B refunding bonds to refinance callable 2015 debt.

Maddie Pradanovic of municipal advisor Hilltop Securities told the board the plan combines new-money borrowing and a refunding to capture efficiencies, and that current market assumptions put the net effective interest rate for the new-money 2026A bonds at about 4% and the refunding 2026B bonds near 3.5%. The district plans to apply roughly $20 million of accumulated debt-service cash to reduce par outstanding on the 2015 bonds, which the advisors said increases the net savings to taxpayers.

"This refunding generates roughly $63.8 million in gross cash-flow savings through final maturity and, after the cash contribution, about $44 million in net savings on a nominal basis," Pradanovic said during the presentation. Bond counsel Courtney Dardi (Butler Snow) and district staff answered technical questions about Tabor constraints, the requirement that 85% of proceeds be spent within three years and the timeline for pricing and closing.

Superintendent Will (referenced in the packet) and finance staff briefed the board on the intended uses for new proceeds: continuing construction and closeout on Rocky Vista High School, completing Talon Ridge Middle School closeout work and funding deferred maintenance and project contingencies. Blaine Nicholson, chair of the bond oversight committee, had earlier described Rocky Vista as roughly 60% spent and Talon Ridge in late closeout, with deferred maintenance items still unmet across the district.

The resolution delegates authority to the superintendent or a designee to finalize terms and execute documents on behalf of the district. The board adopted the resolution on a roll-call vote.

Whats next: staff and advisors are targeting market pricing in early May, with a close roughly two weeks after pricing. The district expects to use issuance proceeds and savings from the refunding to reduce long-term bond costs and apply funds where the bond oversight committee has identified the highest deferred-maintenance needs.

Who spoke: municipal advisor Maddie Pradanovic, bond counsel Courtney Dardi, district finance staff and Director Tom Green. The board vote to authorize the issuance passed on a roll call.