PR: Board authorizes sale of bonds; saves taxpayers millions

In its special meeting on Aug. 4, the Clover Park School District (CPSD) Board of Directors authorized the sale of Qualified School Construction Bonds (QSCB).

The board approved the sale of $17.5 million of QSCBs which will be used to fund a portion of the construction of Hudtloff Middle School. This project is part of the $92 million school construction bond proposition that was approved by CPSD voters in February 2010.

According to Ray Miller, CPSD's administrator for business and capital projects, the board's authorization of the $17.5 million bond sale is the first in a series of sales related to the $92 million authorized by CPSD voters. A key element of these bonds is that CPSD taxpayers will not pay for the interest on these bonds.

The interest on QSCBs, which are "tax advantaged bonds," is paid by the federal government. This is estimated to save local taxpayers approximately $5.8 million over the life of these bonds.

With the sale of these bonds, CPSD officials are delivering on the promise that the approval of the $92 million construction proposition in February 2010 would not increase the current tax rate. The principle payment on the $17.5 million will begin in 2026, as required by the federal law related to QSCBs.

To qualify for QSCBs, school districts must apply through a process established by Washington's Office of Superintendent of Public Instruction (OSPI). CPSD was selected and awarded the opportunity to issue these bonds last month.

Recently CPSD superintendent Debbie LeBeau, school board vice president Walt Kellcy and Miller, met with Moody's Investors Service, a leading provider of credit ratings, research and risk analysis, to present the district's financial status.

According to David Sitterson of DBS Financial Services, the district's financial advisor on bond sales, Moody officials were very impressed by the district's financial and accounting practices, often referring to district practices and procedures as "stellar." Sitterson commented that in his 25+ years in the industry he has never heard a rating agency commend a municipality the way they have CPSD. As a result, Moody's gave the district a bond rating of Aa2. Currently, CPSD is one of only 36 of the state's 295 school districts to receive this high rating.

"I think this is a great example of doing what's best for our students and community," said Miller. "We are keeping our promise to our taxpayers and where we can, we want to save them money," said Miller.

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