The Gardner Edgerton School Board approved the issuance of new bonds and the refinancing of old bonds on April 2.
The new bonds — which will pay for initial projects in the district’s $72 million bond issue –have a 3.56 percent interest rate, which is about 1.25 percent lower than what was projected in mill levy projections over the last year.
“This in turn, creates a favorable setting for the district to maintain the tax pledge that was made to our patrons prior to the January referendum,” said Eric Hansen, business director.
The district also refunded two series of old bonds — issued in 2004 and 2011 — for a savings of $836,000.
Last fall the refunding savings was projected to be $560,000.
The bond projects include a Multi-Purpose Activity Center at the high school, a new elementary school and a new middle school that will be built just east of Center Street and south of Main Street, new turf for the Gardner Edgerton High School football field, renovations at Gardner and Sunflower elementaries, and district-wide technology upgrades, including laptops and audio-visual equipment.
School officials have said the bond issue will not result in a tax increase for at least two years.
However Gardner’s city fees and taxes will likely go up as a result of the city council agreeing to partially fund sewer upgrades to serve the new schools.
The district chose Morgan Keegan from a slate of five prospects as the underwriter for the bonds.
Other companies considered were Piper Jaffray, Stifel Nicolaus, Wells Fargo and Oppenheimer.
Criteria included fees and costs, underwriting experience, and interest rates.
David Arterbury, of George K. Baum and Company, said Morgan Keegan has done “a very good job of marketing the bonds.”
He said that when dealing with multiple maturities, some bonds sell and some don’t.
“In this situation, Morgan Keegan had about $5 million bonds outstanding and they felt comfortable underwriting those bonds,” Arterbury said. “They purchased those bonds without having investors on line for those. Which to me is a nice commitment. It means they were willing to stand behind the district’s credit.”
The school board also got a preview of plans for the new middle school, which is based on Pioneer Ridge Middle School as a prototype
The new school will have the same footprint as Pioneer Ridge, but it’s exterior aesthetics will be unique to its campus.
The middle school is slated to be bid in the fall with a groundbreaking set for November.
USD 231 approves bond sale