Favorable interest rate due to Home State Bank’s being one of the buyers
The Greene County Community Schools fared better than anticipated in selling general obligation loan notes to finance installation of solar energy systems at the district’s three school buildings.
The GO bonds, which will be repaid with future revenue from the voted physical plant and equipment levy, were sold July 31. The Baker Group of Oklahoma City, OK, with the help of Home State Bank of Jefferson purchased $5.165 million in bonds at a true interest rate of 3.3299 percent.
Matt Gillaspie of Piper Sandler, the district’s municipal advisor. provided information at a special board meeting Wednesday to approve the sale.
Four other bids were received, ranging from a true interest rate of 3.5325 to 3.6718 percent.
According to Gillaspie, Home State Bank’s participation was “undoubtedly very beneficial” in the sale. He explained HSB’s participation allowed Baker Group to charge the district a lower fee, as the firm knew it could immediately sell a portion of the bond to the bank, and it also helped them offer a lower interest rate because they knew Home State Bank would be willing to take a lower interest rate in order to help the school district.
First payment on the bonds is due June 1, 206, and will be $578,777. The PPEL has two components – a property tax levy and an income tax surtax. Per state law, only the property tax portion can be used for loan repayment. That amounts to $781,705 in the Greene County district, meaning the bond payments will not eliminate other physical plant and equipment spending.
With principle and interest, the district will pay a total of $6,303,042 over the 10-year length of the bonds.
The district had attempted a private sale of the bonds a month ago; that option didn’t work. According to Gillaspie, the best bid then was 4.34 percent. The district would have paid an additional $214,000 if the bonds had been sold then.
School superintendent Brett Abbotts said Modus Engineering and OPN Architects will do the next step of the project, posting a request for qualifications for a construction manager at risk. That will allow the district to recover 30 percent of the project costs through the Inflation Reduction Act.
That will be followed by bidding out construction on the project. Construction will likely start next May and be completed early next summer.
The school district now has two outstanding bond issues: the bond for construction of the new high school and remodeling of the middle school, which was a 20-year bond issued in 2018; and the 10-year solar energy bonds.
Installing solar energy on the school buildings has the potential to save as much as $237,000 in annual utility costs. Those costs come from the district’s general fund, the same fund used to pay the cost of educating students.
