Central taxpayers will save about $70,000 more than expected thanks to low interest rates on a new $13.1 million series of public school construction bonds, officials say.
The construction bonds will be used for a variety of projects. About $8.1 million is slated for improvements to Central High School, including construction this summer of a new freshman academy on the campus. Installation of new lights at the high school’s baseball field was approved Jan. 13.
Five firms submitted bids to underwrite the $13.1 million worth of bonds. Central voters approved the sale of the bonds in a Nov. 16 election.
The St. Petersburg, Fla., brokerage firm Raymond James & Associates submitted the winning bid, unveiled Thursday, offering the lowest interest rate, 3.47 percent. The Central School Board quickly accepted the Raymond James bid.
“The winning bid is the lowest you’ve ever gotten for any one of your bonds,” bonding attorney Grant Schlueter told the board.
When voters approved issuing the $13.1 million in new bonds, they were told the interest rate likely would be about 4 percent. Voters approved issuing the bonds to pay for improvements, with almost 59 percent saying, “yes.”
“I really expected (the rate) to go up,” said board member Willard Easley, “but to have it go down from what it was is a relief.”
Schlueter credited the school system’s A+ bond rating, recently reissued by Standard & Poor’s, for the low interest rate. He said Central’s practice of maintaining healthy financial reserves helped garner the rating.
Schlueter said another factor in the low rate is that brokerage firms have a dearth of good municipal bonds to sell their customers. He noted that the St. Martin Parish School Board recently sold bonds at a slightly lower rate of 3.45 percent.
The $13 million in proceeds from the sale of the Central school bonds to investors will arrive in early March, Schlueter said.
Superintendent Michael Faulk said he is likely to do as he did in 2010 when the school district issued several bonds and try to pay them off early.
He said the property taxes that finance the bonds are expected to bring in more than the $13.1 million necessary to pay off the bonds over the 20-year life of the bonds.
That extra money can be used to pay them off more quickly, he said.