Bethel School District Sells New Bonds, Saving Taxpayers Millions
The Bethel School District has taken advantage of low bond interest rates to save taxpayers money. A sale of bonds on October 26 that includes a portion of the bonds authorized by voters in 2019, along with a refinancing of existing bonds authorized by the Board of Directors last month, will result in savings of millions of dollars for taxpayers.
The issuance of refunding bonds resulted in a rate of 1.04% on the remaining bond payments of the District’s 2011 bonds, which is a new low for the District. This compares to 3.82% on the bonds being refinanced. The lower rates will save taxpayers over $2.7 million over the next seven years.
The new bonds, which are a portion of the 2019 authorization, will mature over 20 years and have a borrowing cost of just 2.24%. This is half the rate of approximately 4.50% used for planning purposes when describing the cost to taxpayers in 2019 and represents a savings of over $47 million in tax collections.
“This was a great opportunity to demonstrate good fiscal stewardship and save our taxpayers a significant amount of money,” said Superintendent Tom Seigel. He emphasized that the savings will go directly to taxpayers through lower future tax collections. “This is money that will now stay in our community and local economy, rather than go to pay interest on bonds. The savings will also help the District promote future tax rate stability as it sells the remaining bonds approved by voters in 2019.”
Although there has been substantial volatility in the bond market due to COVID-19, the interest rates on these types of bonds returned to near historic lows over the past two months, according to Bryan Verley, the district’s Chief Financial Officer.
“We have been monitoring the market closely over the past several months to identify an opportunity to sell the next portion of new bonds and refinance the District’s 2011 bonds; we are pleased to be able to provide this savings to the district taxpayers,” Verley said.
New Naches Trail Elementary School
As part of the Office of the Superintendent of Public Instruction’s requirements for state funding, a value engineering study is required for what will become the new Naches Trail Elementary. In the application process, a resolution is required to confirm that the value analysis has been accepted by the School Board and will be implemented.
This is necessary in order to be placed on the list for state matching funds.
The Value Engineering Study for the New Naches Trail Elementary School was performed by Roen Associates to review the architect’s design and make recommendations for cost avoidance, cost verification and added value proposals. The School Board unanimously accepted the Value Engineering report for the New Naches Trail Elementary School during their regular November meeting.
Bonds are for Building, Levies are for Learning
All of our bond projects are funded by the voter-approved 2019 School Construction Bond. Next year, our district will have two levies up for renewal. These levy dollars are separate from the 2019 bond.
Our Educational Programs and Operations Levy was last renewed in 2018. It helps pay for critical things like special education programs and extra transportation costs — items the state does not fully fund.
Our Technology Levy funds our iPad program that helped our district transition quickly to online learning during the start of the COVID-19 pandemic.
You can learn more about the Educational Programs and Operations Levy and Technology Levy by clicking here: bethelsd.org/Levy2022