Some of the Nevada school district’s general obligation bonds became callable June 1, and the school board discussed Monday what, if any, action to take on them.
There is $1.875 million still owed on the 2006 bonds for work at the elementary school. The interest rate for those bonds is about 4.1 percent. The current market would allow the district to refinance the bonds at a rate of 2-3 percent.
Matt Gillaspie with Piper Jaffray had given the board four possible scenarios of how to deal with the bonds now that they are callable, meaning they can be paid off early.
The first option is to refinance the bonds now. “Keeping the same structure, but simply replacing the interest rates with new lower rates, we estimate that you might save around $90,000 in interest expense over the coming five fiscal years,” Gillaspie said. “This would allow for slightly more new bonding capacity in 2018 and beyond because the existing bond payments would be lowered.”
The second option would increase the debt service levy to pre-pay the bond principal as of the spring of 2018. This option would save the district about $60,000. Board members seemed to think that was not enough savings to merit a significant increase in the levy.
The fourth options basically have the district making no changes at this time, either because the hassle outweighs the comparatively small savings or because the district wants to prepare for a new bond.
“The savings isn’t massive, so this is not an unreasonable position to take,” Gillaspie said. “You could do nothing because perhaps you want to keep your levy consistent … to prepare for a possible new voted G.O. bond that could come online in fiscal year 2018 or beyond and when a potential ‘new’ bond comes along the ‘increase’ in levy isn’t as substantial.”
“The reality is that allowable growth is not going to be where we want it,” said Superintendent Steve Gray. Because of the uncertainty of state funding, keeping the levy where it currently is gives the district the option to increase it for the general fund in the event that state funding is inadequate.
“It would be easier if they would follow their own rules and publish the budgets when they’re supposed to,” board member Dave Sutherland said of the state legislature. “At the current rate they’re doing things, where we don’t know until after we certify our budget, what the heck are you supposed to do?”
“It’s hard to move things toward debt service when you don’t know what you’re going to need to levy toward the general fund,” Sutherland said.
The bonding information was a discussion item on the agenda. No action was taken at this time.
In other news, Clint Jensen, the construction manager from Story Construction, updated the board on the progress of the Cub Stadium renovations. The press box was to be installed atop the stands Tuesday morning. Interior painting was taking place inside the bathrooms and spirit store. Next week, the glass will be installed in the spirit store. Metal panels will be delivered and installed after Aug. 15.
After Aug. 17, exterior purple paint will be applied to the press box and precast concrete. In the next few weeks prior to the first home game, paving will be completed, remaining fencing will be installed and the job trailer will be removed. Jensen said workers will still be present but the trailer will be removed as the job site is cleaned up prior to that first game.
Kyle Hutchinson, high school activities director and assistant principal, presented the board with some information regarding a new athletics website for the school district. The website will have team rosters and schedules as well as articles about athletic events. Hutchinson said students in the sports management class will be writing some of those articles, and some he will write himself. “I’m really excited about the educational value this brings to our students,” he said.
Justin Gross, director of school improvement and innovation, distributed book to the board members, which they will discuss at the next few meetings. The book “Over-Tested and Under-Prepared, Using Competency Based Learning to Transform Our Schools” will give board members some insight on CBE (competency based education). The district currently has about 30 staff members who are involved with the CBE committee.