May 2003

School District Moves Quickly to Take Advantage of Low Interest Rates

Just five weeks after voters approved bonds for construction and remodeling in Spokane School District, the bond underwriter sold $100 million worth of bonds to take advantage of historically low interest rates that were occurring in 2003.

The action culminated five weeks of intense work by administrators and the underwriter to push the bond sale ahead by two months to ensure responsible stewardship of taxpayers’ monies. That work included meeting with bond rating agencies Moody’s Investor Services and Standard and Poor’s to prove the district’s sound fiscal practices in hopes of affirming the high bond ratings of 1998.

“We’re thrilled that we were able to act quickly to lock in the lowest interest rates in 30 years and to secure our ratings,” said Superintendent Dr. Brian Benzel. “A lower-than-expected interest rate and an excellent rating allowed us to sell more bonds than originally anticipated for this first issuance. This will save taxpayers money.”

Over half of the bonds for the $165 million in projects were sold in this first offering, allowing the district to be able to escalate projects and thus avoid inflation dollars on construction costs. In addition, the earlier- and larger-than-planned sale will earn the district more interest income, allowing more projects to be accomplished than planned. Finally, selling a large chunk of bonds at one time rather than in smaller groupings avoids multiple issuance fees.

“The community should be very proud of the school district,” said John Rose, president and chief executive officer of Seattle-Northwest Securities Corporation, which sold the bonds. “The affirmation from Moody’s and Standard and Poor’s shows that the district is viewed as a sound investment because of solid fiscal practices.”

The first actual improvements began in the summer 2003 when $2.9 million of bond money was spent on projects such as replacing asphalt, enhancing science labs, and doing boiler work at a variety of schools.
Throughout the six years of the bond, upgrades to technology, security, and infrastructures of every building will be completed.

“The successful bond and levy election is a tribute to this community’s conviction that every child in every school is important,” said Superintendent Brian Benzel. “It is indeed an exciting time to be working for this community’s children, and we are very grateful to Spokane residents."