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Board authorizes $122 million SAVE revenue bonds to finish construction projects
Summary
The Cedar Rapids Community School District board approved a package of resolutions authorizing $122 million in SAVE (sales, services and use tax) revenue bonds, plus related agent appointments, disclosure filings and a short-term interfund loan to cover timing differences before bond proceeds arrive.
The Cedar Rapids Community School District board on April 13 approved a four-part resolution package to authorize about $122 million in school infrastructure revenue bonds backed by the district—s SAVE (sales, services and use) tax. The board also approved routine implementing documents and a temporary interfund loan to cover a bond payment due before the proceeds are received.
Board members voted in separate roll-call motions to appoint paying and transfer agents, place the tax-exempt certificate and continuing disclosure certificate on file, and to authorize the Series 2026 bond issuance under chapter 423F of the Iowa Code. The actions were presented as a coordinated package that will finance ongoing construction at several elementary and high school projects and draw on the district—s SAVE revenue stream rather than property-tax levies.
Director (facilities/finance) explained why the district staged the borrowing: "The reason you don't go and bond all of it at once is then you have money sitting that you're paying interest on," the director said, adding that the current issuance "is not to cover an overrun. It's to pay the costs that we were expecting to pay." The district reported low change-order percentages so far on major projects and said the timing of bond sales is intended to minimize interest expenses.
The board also approved a temporary interfund loan from the management fund to the SAVE fund to cover a 2019B bond payment due before the bond proceeds are expected in May; finance staff said the loan will be repaid with interest once proceeds arrive. Finance staff estimated about $17 million of incurred project costs will be reimbursed from bond proceeds and said the reimbursements and repayment would be reported to the board when complete.
District officials emphasized that the bonds are revenue bonds tied to the SAVE tax and not general-obligation bonds that would directly raise property taxes. The board recorded roll-call votes for each resolution.
The bond authorization clears the way for the district to complete multiple elementary and high-school construction projects already underway. The district said it expects to receive bond proceeds in early May and will report back when the interfund loan is repaid.
