A bond sale is much like a home mortgage in that it funds construction improvements now, with payment of the loan and interest spread out over 20 years.

The district’s excellent bond rating, comparable to a credit rating, helped drive down the interest rate, and brought in nine lending institutions bidding to do business with the district. The winning company, Merrill Lynch & Co. New York, offered the best interest rate at 4.5 percent. (Current home mortgage interest rates are at 5.75 to 6 percent.)

The action culminates weeks of work by district staff and the underwriter to meet with bond-rating agencies to prove the district’s sound fiscal practices, establish a favorable bond rating, take advantage of current interest rates and ensure continued good stewardship of taxpayer dollars. Contributing factors to the district’s excellent bond rating include:
• Thriving local economy
• Solid fund balance (the district’s funds set aside for emergencies)
• Stable, effective administration and work force
• Collaborative process (between unions, administration, local businesses and municipalities)

The remaining $50 million will be sold at a second sale in a few years. Selling a large portion of the bonds at one time rather than in smaller groupings avoids multiple issuance fees and the risk of higher interest rates and a worsening economy in the future.