The Atlantic School Board, Tuesday afternoon, passed a Resolution approving the Contract and Bonds for the Washington Elementary School Parking lot project. The contract is with Precision Concrete Services, of Atlantic.

The Board heard from the District’s Bond Counsel Travis Squires, with PiperJaffrey, with regard to the sale of General Obligation Bonds to cover the cost of facilities improvements, and the levy of taxes for the sale. Bids for the purchase of the bonds were received at 10-a.m. Tuesday.

Squires said “In summary, over the last month we completed the bond rating process. The District was assigned an “A-Plus” rating from S&P (Standard and Poors), which is very good (and) puts (The district) in the upper half school district bond ratings in Iowa.” There were three electronically submitted bids for the bonds. Squires said he was surprised there weren’t more bids, but the economy has played a role in that factor.

Each of the three bids had interest rates assigned to them, of 5% and 4% at the onset, with a declining interest rate beginning in 2026. The rates for the bonds are different from the yield investors earn, according to Squires. The average interest rate is 2.15%. The purchase price for $9.5-million dollars in bonds at $10.2-million. The winning bidder was Robert W. Baird & Co., Inc., from Milwaukee, WI. They have already wired the District $95,000 as a good faith estimate. A Resolution passed by the Board Tuesday, locks in the District’s interest rate.

Squires said because of the bond rate, the district is limited to the total bond amount plus premium to be under $10-million per calendar year, so the G-O Bonds Series 2019 were later resized to $9.26-million, which leaves the District with $240,000 in voter authority that is not being issued, but the District is actually getting more than $9.5-million, because of the Premium. Long story short, the final True Interest Rate is 2.146%, which means the District will pay less than $1-million interest on the $10-million in debt.

The levy rate starts out in Fiscal Year May 2020 at 3.498%. Next year the rate in 4.04%, but then in 2022 it drops to 2.73% and finally levels off at around 1.88%. The next step, Squires said, is to start conversations with local banks to gauge their interest and at what rate level, before negotiating a a good solution.