WAVELY – The Board of Education on Monday approved a series of decisions related to the sale of $31 million public commitment bonds to help fund a pair of new elementary schools.
UMB Bank of West Des Moines will act as the payment agent, bond registrar and transfer agent for the Waverly-Shell Rock Community School District project. In addition, the Board approved the tax exemption and ongoing disclosure certificates, and announced its formal intent to issue debt. It also amended an earlier bond issuance and tax decision to reflect JP Morgan Securities of New York City as the buyer.
JPMorgan, the lowest of the five bidders, was the financial institution chosen at a special meeting on June 1. The bonds were purchased at $32.73 million with a real interest rate of just under 3.4%. Over a 20-year period, the region will repay the bonds plus net interest of more than $12.8 million.
“The addition of this new bond did not raise our tax collection rate at all for the Waverly Shell Rock area,” said Chairman Dennis Epley. “Because at the same time this tax started, middle school… this tax will be repaid. So one goes and the other goes.”
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Epley explained that in 2008, the tax was added to pay for the construction of Waverly Shell Rock Middle School, which will be paid in full this summer.
The new bond issuance will help fund the construction of new elementary schools in Waverley. There are also plans to remodel Shell Rock Elementary School and install new air conditioning at Waverly Shell Rock High School.
The board agreed to accept bids for the bond last month after area residents voted for it and the resulting property tax in March 2021. The ground was also broken in May at one of the new schools at 2513 Horton Road. The second site will be located on 17 acres of land located at 2915 Fifth Ave. NW, with both projects looking to be completed during fiscal year 2023-24.
The general commitment bond funds are part of the $57 million that Waverly-Shell Rock owns for its construction and renovation projects. According to Director Ed Clamfoth, it is one of three sources of income that will be used.
“Our intention is to sell revenue bonds in the fall, which is to borrow against sales tax revenue — about $22 million — we don’t know yet,” Clamfoth said. Revenue bonds will be repaid with the district’s share of the 1% statewide sales tax for schools.
“That’s a little bit up in the air, but we intend to get the board to agree to that in the fall,” he noted. “And the other cash is on hand. So these are going to be the three sources we are going to use for those projects.”
The cash flow that the region has for the projects is $3.5 million.
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