On Dec. 12, Board Chair Brad Dykstra and I went to Piper Jaffray in Seattle to participate in sales of our bonds to the public. What happens is Piper Jaffray (PJC) agrees to purchase all of our bonds according to the parameters set by the board and then uses that inventory to fill orders for bonds from investors across the country. PJC has been preparing investors for over a week that this sale was coming and what the terms would likely be. That way, when the sale opens, investors are ready to place orders. The sale opened at 7 a.m. PST and closed at 9:30 a.m. PJC did some negotiating with some of the investors to fill in some areas that remained unsold, but by 10 a.m. PJC was satisfied that they could sell the bonds that remained within a short amount of time and we finished for the day.
PJC and our bond attorney are now preparing closing paperwork for signatures and posting documents with the government. We expect to close by Dec. 27 and $7 million will be deposited to the district's Capital Projects Fund that day.
We were able to reduce the term of the bond by one year (19 years instead of 20). This will save the district about $500,000. In addition, by purchasing in 2018 rather than 2019, we're saving an additional $500,000 in cost over the term of the bond. We predict tax rates will be 76 cents per $1000 every year (assuming 3% valuation growth). We are paying a Total Interest Cost of 3.24% In addition, our partners agreed to very reasonable fees for their services over the last four years.
As stated, some bonds with early maturity dates remained available at the end of the sale. They can be purchased in $5,000 increments by calling PJC at 800.552.0614. (Toledo Lions Club approved purchase at their general meeting last night.)
Some additional good news came through this week. The Office of Superintendent of Public Instruction (OSPI) did an updated estimate of our State Construction Assistance Program eligibility. Our last estimate was a little over $8 million. Our new estimate is $9.8 million. This means that we have nearly $2 million more dollars to use to cover costs of the new school. This is helpful because construction costs are escalating dramatically each year and we'll need every penny to complete this project properly.
The Design Committee, chaired by Dale Merten will meet again on Dec. 19 at 6 p.m. at THS. The goal of the meeting will be to review the Statements of Qualifications from Construction Management firms. The committee will recommend 2-3 firms to interview with the board. If you'd like to participate in this important work, please contact Dale or come to the meeting on the 19th.