CPSD takes advantage of tax exempt bonds and good credit rating

Ben Sclair | February 5, 2013

By Kim Prentice, Director of Community Relations

LAKEWOOD, Wash. – A solid credit rating and tax exempt bonds allows Clover Park School District administrators to save local taxpayers more than $19 million.

In February 2010, with a 62.44 percent approval rate, local voters approved a $92 million school construction bond proposal. The bonds are being used to build a new Hudtloff Middle School, Harrison Preparatory School and a new elementary school (a consolidation of Oakwood and Southgate Elementary Schools).

In August 2010, the district sold $17.5 million of the bonds to take advantage of federal Qualified School Construction Bonds (QSCBs), which are tax exempt, savings taxpayers $15.2 million in interest over the life of the bonds (17 years).

A year later, the district sold another $6 million in QSCB tax exempt bonds and $19 million in regular general obligation bonds, saving taxpayers another $4.24 million over the life of the bonds. The regular general obligation bonds sold at a premium, which means investors paid more than par value for them, providing more income to the district for less interest.

In December 2012, the district sold $49.8 million worth of general obligation bonds, also at a premium.

“We’re working every day to save our taxpayers money,” said Lynn Wilson, administrator for business services and capital projects.

With the recent sale of the $49.8 million in bonds, the district will use those proceeds for the Harrison Preparatory and elementary school construction project.

In January, Hudtloff Middle School students and staff returned from Winter Break to begin learning and teaching in the new school. The Hudtloff Middle School project is anticipated to be complete in Fall 2013.