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Residents get first crack at bonds
Douglas County residents will have the opportunity to purchase the new, voter-approved, double-exempt, tax-free school bonds before the national public does.
By By: Tom Herman
Douglas County residents will have the opportunity to purchase the new, voter-approved, double-exempt, tax-free school bonds before the national public does.
"We will be offering an initial $140 million to county residents through seven investment houses," said Bill Reimer, chief operating officer for the school district. "The local residents deserve the right to buy the bonds first."
In November, the voters of the county approved the issuance of $178.2 million in tax-free bonds to build 10 new schools and remodel or expand nine others over the next five years.
"We will issue the balance of the authorized bonds as needed," Reimer said. "The state requires that we have the total amount of construction costs on hand before any new schools are begun.
"We must, therefore, issue the first $140 million now, as six of the new schools will be built through 2003 and seven of the remodelings are also in that time frame," he said.
The bonds can be purchased for short-term maturing Dec. 15, 2004, to the maximum of 20 years maturing Dec. 15, 2021. The short-term bonds will earn approximately 4.2 percent and be exempt from state and federal taxes, Reimer said.
The securities are rated Aa3 by Moody's.
There is a minimum $5,000 investment required, but no maximum that can be purchased by any one buyer. Local bond purchases must be finalized by Friday. As of Tuesday, the bonds will be placed on the national market.
"The last time the school district offered this type of local option was on a million dollars in bonds five years ago," said Reimer. "That issue sold out right away. We are hoping this local option will be successful, but don't think the whole $140 million will be sold locally."
Although the bond issue authorization for the school district over the five-year period is $178.2 million, Reimer said the district has the option of not issuing bonds if a growth slowdown occurs.
"We pretty much know the growth will be there for the elementary level needs," Reimer said. "Based on the number of children in the elementary and pre-elementary age groups, the number of schools we will need is definitely there.
"The elementary schools naturally feed into fewer middle schools and high schools, so the growth is also there for those secondary levels too."
Even if the growth stopped, the school district has flexibility with its facilities, Reimer said.
"We could sell off the portable school rooms and drop back to just permanent building use. We could also change to traditional year schooling and eliminate year-round education. That would make good use of facilities, so we really haven't over estimated growth or financial needs for construction."
Security firms offering local purchasing are Merrill Lynch, Smith Barney, Piper Jaffrey, Morgan Stanley, Dain Rauscher, A.G. Edwards & Sons Inc. and Hanifen, Imhoff Division of Stifel, Nicolas and Co. Inc.
"We will be offering an initial $140 million to county residents through seven investment houses," said Bill Reimer, chief operating officer for the school district. "The local residents deserve the right to buy the bonds first."
In November, the voters of the county approved the issuance of $178.2 million in tax-free bonds to build 10 new schools and remodel or expand nine others over the next five years.
"We will issue the balance of the authorized bonds as needed," Reimer said. "The state requires that we have the total amount of construction costs on hand before any new schools are begun.
"We must, therefore, issue the first $140 million now, as six of the new schools will be built through 2003 and seven of the remodelings are also in that time frame," he said.
The bonds can be purchased for short-term maturing Dec. 15, 2004, to the maximum of 20 years maturing Dec. 15, 2021. The short-term bonds will earn approximately 4.2 percent and be exempt from state and federal taxes, Reimer said.
The securities are rated Aa3 by Moody's.
There is a minimum $5,000 investment required, but no maximum that can be purchased by any one buyer. Local bond purchases must be finalized by Friday. As of Tuesday, the bonds will be placed on the national market.
"The last time the school district offered this type of local option was on a million dollars in bonds five years ago," said Reimer. "That issue sold out right away. We are hoping this local option will be successful, but don't think the whole $140 million will be sold locally."
Although the bond issue authorization for the school district over the five-year period is $178.2 million, Reimer said the district has the option of not issuing bonds if a growth slowdown occurs.
"We pretty much know the growth will be there for the elementary level needs," Reimer said. "Based on the number of children in the elementary and pre-elementary age groups, the number of schools we will need is definitely there.
"The elementary schools naturally feed into fewer middle schools and high schools, so the growth is also there for those secondary levels too."
Even if the growth stopped, the school district has flexibility with its facilities, Reimer said.
"We could sell off the portable school rooms and drop back to just permanent building use. We could also change to traditional year schooling and eliminate year-round education. That would make good use of facilities, so we really haven't over estimated growth or financial needs for construction."
Security firms offering local purchasing are Merrill Lynch, Smith Barney, Piper Jaffrey, Morgan Stanley, Dain Rauscher, A.G. Edwards & Sons Inc. and Hanifen, Imhoff Division of Stifel, Nicolas and Co. Inc.
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