Third phase of high school project financing still in works

On Monday night the Decorah Community School Board listened to comments and recommendations from Jon Burmeister of Public Financial Management regarding the third phase of funding, via bonding, for the high school renovation project.  About $8.3 million needs to be financed for the final stage. Additional money (above that already financed) will need to drawn to pay accounts in May 2012.

A limit of $10 million in bonding in a year exists to keep the bonds "bank qualified" and eligible for lower rates.  Burmeister and the board currently see the best option as preparing for bond sale around Thanksgiving, with the bonds actually being issued in January of 2012.  Another option being considered would be to issue bonds almost immediately, or sometime before the end of 2011 for an amount equal to the remaining bonding limit for this year, about $3.5 million. Then the remainder of the bonds, about $4.8 would be issued in 2012. Burmeister and Superintendent Mike Haluska will consult regarding the next step which would depend on next month's estimate of the district share of state sales tax receipts, and an opinion regarding the best timing for bond rates.  Currently the market is very good.

Although there is some "trickle down" regarding ratings for states and municipalities after the U.S. credit rating was downgraded, there has been no sign of that in Iowa. Additionally the Decorah schools budget is dependent on less than 3 percent of federal aid, so the district should continue to have very favorable bond ratings.

The board also discussed their commitment to John Cline renovation, specifically to include climate control. However, legal opinion received by the board suggests that financing that project should not be combined with bonds for the high school renovation. The board will later discuss how that will happen but it is expected to come from revenue streams other than the additional issuance of bonds.