School bond sale begins
Average rate said to be favorable for district and its taxpayers
School bonds for the new Lansing Elementary School went on sale Wednesday, and a large percentage of the $23.6 million in bonds have sold, a representative with the Lansing school district's financier said.
Greg Vahrenberg, a managing director with the firm Piper Jaffray, said not all, but a substantial percentage, of the bonds were sold Wednesday. He said he could not offer a specific dollar amount of bonds sold, but said those sold Wednesday locked in an average interest rate of 4.48 percent. Vahrenberg called the rate favorable.
"We were worried that interest rates were going to increase on us, but they dropped down just as we were selling the school bonds," he said.
The bonds will pay for a new 147,000-square-foot K-5 elementary school on district-owned land on East Mary Street and an addition to Lansing High School that will include a 900-seat auditorium and an instrumental music room. Voters approved the projects in April.
As a result of the low interest rate, Vahrenberg said the mill levy would be "a little better off" than the rates originally given to taxpayers. The numbers are not final, but he said he expected the mill levy to be about 13.9 mills total until 2013; after that, the rate would probably drop down to about 10.7 mills for the life of the bond issue. He said the projected mills were based on conservative growth rates.
Original estimates put the increased mill levy at 17 mills the first year. The number was revised in March to 14.334 mills in the first year.
The first payment on the school bonds is due March 1, 2006, Vahrenberg said, so taxpayers will see the increased mill levy on their property tax statements later this year.
Lansing Schools Superintendent Randal Bagby said, "When anything costs us less than we thought, it's always a positive thing."
Bagby said he would ask the school board to approve the bond resolution at the board's meeting on Monday. Once the board approves the resolution, he said, the money will be wired to the district on May 26.
Bagby said the district's architects from Wilson & Co. Engineers and Architects would also be at Monday's meeting to discuss a schedule for building construction.
"Everyone wants to break ground, but there's quite a bit that needs to happen first," Bagby said.