The sale of the final series of general obligation school bonds approved by the Ames Community School Board brings down the cost of financing the upgrades to all five Ames elementary schools by more than $20 million. The Board approved resolutions for the final bond sale of $9.955 million on Monday, Dec. 2 at an interest cost of 3.07 percent.
Karen Shimp, Chief Financial Officer for the Ames Community School District, credits the savings to lower-than-expected interest rates and sound fiscal management.
“We used a financing strategy that accelerated the bond schedule to take advantage of interest rates that were lower than the rate expected at the time the voters approved the bond referendum in April 2012,” Shimp said.
Tim Oswald, of Piper Jaffray, said the District’s solid financial management and stabilizing enrollment yielded excellent bond ratings from Moody’s and Standard and Poor’s, which attracted the best interest rates from bidders.
Oswald said the bonds’ all-in true interest is 2.44 percent, compared to the original estimate of 4.32 percent. The net interest in dollars is $11.01 million, compared to the original estimate of $31.6 million.
Voters approved a $55 million bond referendum in April 2012. The first construction project, a school on Miller Avenue that will replace Edwards Elementary School, will be completed for the start of the 2014-15 school year. All five elementary schools will be rebuilt or remodeled by 2016.