$4.25 million available from state for school construction

ROYAL CITY - The State of Washington will put up $4.25 million toward new school construction in the Royal School District if the voters will approve a construction bond sale.

And it doesn't matter the amount of the bonds. The state contribution is the same if the voters agree to $1 million or $100 million, according to school district business manager David Andra.

The district will ask the voters for $8.75 million in a bond sale election planned for February. Combined with the state contribution and $1.1 saved by the district for construction, the total of $14.25 will pay for the expansion of the fifth grade POD into an intermediate school and the addition of four classrooms and two restrooms at the high school.

Andra said the administration brought an intermediate school-only option to the district facilities committee to make the bond election more attractive to voters. The consensus opinion was in favor of the entire project.

"They said they didn't want us coming back to ask for more right away," he said.

The construction plan the committee wants will get the district five years down the road, Andra said. At that point the state will make funds available for modernization of all buildings.

According to Superintendent Rose Search, the construction is needed. Even though the district added four pre-fab classrooms this year, crowding persists, particularly in the hallways and cafeterias.

"We really don't want to put in more portables," Search said.

The last time the RSD ran a bond election, the state contribution was less than $2 million. It took a jump when the state reclassified the Royal School System from K-12 to K-8. That changed the state-recommended space requirements.

School construction bonds are sold to investors on the bond market. They are sold to an underwriter. It finds investors, who commit their money for 15 years.

Because of the way the Royal administration manages its finances, the bonds are sold at favorable rates of interest. The district has no debt and no credit rating, Andra said.

There will be two sales, at 2.88 percent and 3.39 percent. Both figures include 1.5 percent built in for unforeseen changes in the market.

"We're pretty conservative with our calculations. We probably won't pay those rates," Andra said.

Andra noted the committee considered two options regarding the number of years to redeem the bonds. It chose 15 so that property owners would see their bill go up by only $1.19 per $1,000 of property value, or $119 per year for a $100,000 home.

The other option was 10 years at $2.07 per $1,000.