Roundup Public Schools
Roundup Elementary and High School Districts
Bond Issuance Results in Significant Interest Savings
For Taxpayers over Election Estimates
On Tuesday, November 18, Roundup Elementary and High School Districts (“the Districts”) successfully completed the financing of $7,337,000 and $2,500,000, respectively, in tax-exempt obligation bonds for school improvement projects. District officials were pleased the final interest costs were lower than originally projected to voters. With the final Bond figures, the Districts and taxpayers will have $1,112,810 less in interest costs over the term of the Bonds compared to election estimates.
The true interest cost rate on the Bonds is approximately 3.10% which is more than a full percent point less than the original estimates communicated to voters of 4.18%. The term of the tax-exempt bonds is 20-years with a final maturity on July 1, 2035. Yields to investors ranged from 0.55% in the first maturity in 2016 to 3.26% in 2035. The Bonds were offered and sold through D.A. Davidson & Co. to local and other Montana investors, banks, and institutions.
As part of the financing process, the Districts each received an “A+” credit rating with a stable outlook form Standard & Poor’s Rating Services. The S&P rating reports specifically indicate the favorable ratings due to the Districts’:
- Adequate income levels and extremely strong per capita market value;
- Stable financial performance and very strong reserves; and
- Low debt burden as a percentage of market value and a lack of additional debt plans.
Voters approved the issuance of the Bonds on September 9, 2014. Additionally, the Districts received a grant from the Montana Coal Board in the amount of $500,000 to be used to pay costs associated with the projects. Construction is expected to commence in April 2015 and conclude by August 2016.
The Elementary District Bonds are being issued for the purpose of providing funds to pay the costs of designing, constructing, and equipping a new kindergarten through 6th grade school on land owned by the School District located to the north of Roundup City Park, with such school to consist of classrooms, a library, a gymnasium, a cafeteria, and a kitchen with food preparation facilities to service grades kindergarten through twelve, and related improvements.
The High School District Bonds are being issued for the purpose of providing funds to pay costs of acquiring the kindergarten through 6th grade’s interest in the Community Center located at 700 3rd Street West, Roundup; paying the costs of improvements to the existing High School Building to include a kitchen and common area, office space, and locker room improvements; and related improvements.
Prepared by DA Davidson