Moving toward a $23 million bond issue in April, the School of the Osage Board of Education voted recently to refinance more than $9 million in existing debt at a significant savings to the school district.
The decision to refinance the Heritage Building renovation bonds will save the district about $132,000 in interest over the next 17 years at a significantly lower interest rate. Joe Kinder of George K. Baum & Co. investment bankers of Kansas City told the board that the interest rate will drop from 4.9 percent net to 2.9 percent net.
The motion, approved unanimously, was to sell $9,075,000 of general obligation school refunding bonds.
From an historical perspective, Kinder said, in 2007 before the recession school districts could borrow money for just one year at a rate of 3.9 percent. Today, School of the Osage is borrowing money for 17 years at 2.9 percent.
"So, to go out 17 years and get such a good rate, it's a nice way to go ahead and lock in some really low interest costs as you look at future facilities plans," he said.
The other good news Kinder shared with the board is that Standard & Poor's Financial Services has given the school district an AA-minus bond rating, which he called "fantastic." Fewer than 5 percent of districts have a higher rating, he said.
He said the rating is based on an evaluation of economic factors, indicators in the community and the management of the district by the board and administration. The S&P rating came after Superintendent Dr. Brent Depee was interviewed by S&P officials for about an hour.
"You should feel good about that," he said.
AAA is the highest rating available, and only a few districts in the state qualify.
"You're going to save three times what the state requires and be able to position yourselves to address facilities needs with lowest possible tax rate from a bricks and mortar perspective," he said.
School of the Osage District voters will be asked in April to approve a $23 million bond issue to upgrade facilities at all four buildings -- and build a new, innovative Early Childhood Center on the Heritage Campus in Lake Ozark. The center would be located at the former location of Mills Elementary which was demolished several years ago when the Heritage Building was renovated.
The Early Childhood Center, estimated in size at 11,700 square feet, is the core of the proposed bond issue at roughly $5 million.
Designers from Sapp Design Architects of Springfield have been working with school officials for several months to identify needs, and design facility changes to accommodate those needs.
The largest piece of the facilities plan is the Early Childhood Center.
"In the district's first Strategic Plan, we had Pre-K Readiness as one of our needs and that was five years ago," Depee told the board in October. "We had 50 preschoolers and two classrooms then. Five years later, we have five classrooms and 100 preschoolers and we're turning applicants down because we don't have the room at Heritage."
There are students in the area being underserved, he noted, and there are no empty classrooms at Heritage as the district has grown in recent years.
He anticipates more growth within the district as residential areas near Fish Haven Road and Rt. 242 develop.