As a result of more favorable than expected interest rates, USD 373, in conjunction with its bond underwriter, recently announced a reduction in the overall cost of the upcoming bond proposal for Newton schools.
With a supplemental resolution that clarified election language passed at the last USD 373 Board of Education meeting, the proposed bond issues were approved to put to a vote on Sept. 3. The first would see the issuance general obligation bonds totaling $61.3 million.
The purpose of the bond is to pay the costs of renovations and other improvements for improved security, safety with storm shelter improvements, improved heating, ventilation and air-conditioning systems, improvements to building interiors, and additional educational and support spaces at the existing Newton High School, Chisholm Middle School, Santa Fe 5/6 Center, Cooper Elementary School, Slate Creek Elementary School, South Breeze Elementary School, Northridge Elementary School, Sunset Elementary School and Walton Rural Life Center.
The Newton school board also approved an additional, second question in its resolution regarding $24.4 million in general obligation bonds for the construction of a new elementary school in the district (south of town, though an exact location has not been decided).
Given the pressing needs and improvements tied to question one, it has been noted by the Board of Education that the district will only move forward with the bond project tied to question two if question one is approved — meaning there will be only three potential outcomes of the vote: bonds issued for proposition one, bonds issued for both propositions or no bonds issued.
For question one, a monthly increase on a $100,000 home will drop to an estimated $7.13 per month ($85.56/year) under the new interest rates, from an original $7.91. For question two, a monthly increase on a $100,000 home will drop to an estimated $3.35 per month ($40.25/year), down from $3.57.
Payment of said bonds is scheduled over 20 years on question one and 25 years on question two, with the total costs increasing the bond and interest levy a combined 10.94 mills if approved. The district is also eligible to receive a 28% match in funds — estimated at $25.7 million on question one alone — from the state on the proposed bond project, which could total more than $38 million collected from throughout the state to help fund the project.
“Fiscal responsibility is a core tenant of our district and we’re pleased to be able to extend those efforts to this bond proposal,” said USD 373 Superintendent Deb Hamm.
George K. Baum & Company, the district’s bond underwriter, credits the improved rates to a change of direction from the Federal Reserve Bank, which opted against the projected December interest rate increase (and stated an intention to avoid further increases in 2019) that was linked to projected inflation. This allowed the firm to adjust the original projected terms from 4.25 percent for question one and 4.75 percent for question two down to 3.5 and 4.0 percent, respectively.
More information on the bond proposal, including a full scope of work, can be found at www.usd373.org.