MLSD sells $45 million in school construction bonds

MOSES LAKE — The Moses Lake School has finally sold some school construction bonds.

Speaking at a regular meeting of the Moses Lake School Board on Thursday, Superintendent Josh Meek said the first tranche of $45 million in construction bonds was issued that morning during a complex process that took more than three hours in which investors weighed the risks with the benefits to come up with both prices and interest rates for the bonds.

Meek said the process was a little unnerving since Thursday was the second day of a major market downturn which saw the Dow Jones Industrial Average fall by more than 1,000 points, largely over fears of higher interest rates.

“It was a positive sale,” Meek said.

According to Meek, there was enough interest in the bond issue that the district was able to lock in “interest rates close to historic lows.”

“A number of large companies were very interested in this, but it was very complex,” added Board Member Vicky Groff.

MLSD voters in February 2017 approved by a three-vote margin $135 million in school construction bonds, originally to build a second, 1,600-student high school and an 11th elementary school for the district. A group of voters appealed the certification of the election, claiming the Grant County auditor did not follow the law in counting disputed ballots, and after a year and two court hearings, the state appeals court in Spokane upheld the certification of the election.

However, the passage of time and the election of two new board members opposed to the big high school forced the district to change the project. The MLSD will now be building two new elementary schools and a smaller, 700- to 900-student high school.

The proceeds from this bond sale will be used to begin construction on the two new elementary schools, which is slated to begin next year, though the sites for those school have not been chosen yet.

The district envisions at least one more, and possibly two more, bond issues. Along with the current outstanding debt from the last round of elementary school construction, Meek said the new bonds — when completely issued — would add $1.54 per $1,000 in assessed value, giving MLSD taxpayers a $2.24 per $1,000 tax bill to pay back the bonds.

According to the website run by the Municipal Securities Rulemaking Board (MSRB), which tracks and regulates state and local government bond issues, the MLSD issued roughly $45 million in bonds in 15 lots with maturity dates varying from December 2019 to December 2036.

However, according to EMMA — the MSRB’s Electronic Municipal Market Access website, which keeps a database of all bonds issued by states and local governments in the U.S. — there are still three lots of bonds in the issue outstanding to sell or record with maturity dates of 2020 through 2022.

According to one broker, the MLSD construction bonds are available for resale on the “secondary market” in $1,000 increments.