School district saves $4 million by waiting a month to issue 3B bonds | VailDaily.com

School district saves $4 million by waiting a month to issue 3B bonds

EAGLE — Patience pays, and Eagle County Schools has saved roughly $4 million by waiting a month to issue its voter-approved bonds.

Eagle County voters in November gave the district permission to borrow $144 million for construction and renovation projects.

The district was scheduled to borrow that money in December by issuing bonds. However, Eagle County Schools Chief Operating Officer Sandra Mutchler and the district's bond counsel, George K. Baum & Company of Denver, anticipated interest rates would fall in coming weeks.

They were right.

When the school district issued its bonds last week, the 20-year interest rate was .25 percent lower than it was in December — 3.22 percent compared to 3.45 percent.

That will save around $4 million over the 20-year life of the loan.

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"We are immensely grateful to our community for their support of ballot measure 3B, the bond question, which will enable us to transform our schools in ways that would never have been possible without the funding produced by the sale of the bonds," Eagle County Schools Superintendent Jason Glass said.

Unsure markets

School bonds offered in December encountered an interest rate market unsure of direction and are now saddled with higher-than normal rates, the bond company said in a statement. By waiting until January, the school district hit a time when demand for high quality bonds was high, and investors were willing to accept lower interest rates.

The school district's strong credit rating (Aa2) also helped, the bond company said.

"The superior credit rating resulted from the administrative team's strong financial management of the district, considerable fund balance and the positive impact of the recent taxpayer approval of a sizable bond issue and a mill levy override," the bond company said.

Don't wait, pay more

Several other Colorado school districts around the state offered their bonds in December and paid the higher rates, including Denver Public Schools, Academy 20, Aurora Public Schools, Adams 12 5 Star and St. Vrain Valley RE-1, the bond company said.

When it's all paid off, the tab for Eagle County's 3B bond issue — a loan repaid via higher property taxes — is $232,898,947, but only if the bonds are never refinanced or paid off early, which is unlikely, the bond company said. The contract allows the school district refinance the bonds in 10 years if interest rates are lower than they are now.

Planning begun, construction coming

Planning for the some of the projects is underway. Construction is scheduled to begin this spring and summer.

The biggest project will be renovations and expansion of Eagle Valley High School in Gypsum, and replacing Eagle Valley Middle School and Eagle Valley Elementary School in Eagle.

"With these proceeds, we'll be constructing a new campus in Eagle to accommodate our current and future needs, expanding Eagle Valley High, and renovating many existing facilities to upgrade not only their learning environments, but also improve security systems and energy efficiency district-wide," Glass said.

Staff Writer Randy Wyrick can be reached at 970-748-2935 and rwyrick@vaildaily.com.

By the numbers

Avon Elementary: $1,879,152

Brush Creek Elementary: $1,044,091

Eagle Valley Elementary: $24,116,193

Edwards Elementary: $2,423,468

Gypsum Elementary: $2,523,917

June Creek Elementary: $412,225

Red Hill Elementary: $1,603,927

Red Sandstone Elementary: $12,704,417

Homestake Peak: $2,990,382

Berry Creek Middle: $2,669,559

Eagle Valley Middle: $25,716,350

Gypsum Creek Middle: $1,892,719

Vail Ski & Snowboard Academy: $2,380,974

Battle Mountain High: $847,243

Eagle Valley High: $31,244,335

Red Canyon East, Edwards: $1,089,513

Red Canyon West, Eagle/Gypsum: $2,998,219

For more information, go to eagleschools.net/3B