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Progress so far:
At the January 15, 2018 regular meeting of the Miami R-I School District Board of Education, the Board voted to put a $826,000 General Obligation Bond issue on the April 3, 2018 ballot. If successful, the proceeds from the bond issue will fund the construction and equipping of an additional gymnasium to accommodate the scheduling of athletic practice sessions and physical education programs along with other remodeling and repair improvements to District facilities. Molly Downs, Board President, stated, “Currently, the athletic teams all share the one gymnasium for practices. This results in practice sessions starting as early as 6:00 a.m. and ending as late as 8:30 p.m. An additional gymnasium will provide more flexibility for scheduling these practices as well as physical education programs during the school day.”
The District’s municipal bond underwriter, L.J. Hart & Company, first presented information on how to fund capital facilities needs at a January 8, 2018 special meeting. The information included different funding mechanisms, repayment plans, and the estimated levies associated with each option. After a detailed discussion, the Board of Education decided to pursue a general obligation bond issue to fund $800,000 of the $1,200,000 project. This financing type was chosen because it is the most economical way to borrow the money in terms of costs of issuance and interest rates. The fifteen-year repayment plan was selected because Board members thought it was optimal in relation to the required levy and total interest expense.
The Board of Education and administration plan to contribute $400,000 of District funds to minimize the tax increase to the patrons. Low interest rates and rising construction costs are two advantages to borrowing funds to complete the project now instead of waiting until the District has saved the full $1,200,000. Interest rates are historically low with the estimated average interest rate on these bonds projected at 3.50%. Additionally, with construction costs rising, the price of the additional gymnasium is likely to increase each year that the project is delayed. The Board and administration have done a good job of maintaining the facilities and preserving adequate reserves without asking the voters for a tax increase since 1993. Furthermore, the District has not had a debt service levy to support general obligation bonds in at least the last 25 years.
According to Tom Pisarkiewicz, President and CFO of L.J. Hart & Company, a 41 cent levy will be required to support this bond issue with the fifteen-year repayment program. This 41 cent adjustment represents an additional expense of $77.90 per year (or $6.49 per month) for a home with a fair market value of $100,000. “When we compare our total tax levy of $3.8472 to the other Districts in our area, it currently ranks 15th out of 20 and falls below the average of $4.4593. With the additional 41 Cents, the total tax levy would only increase to $4.2572, which is still below the average and ranks 13th out of 20,” Superintendent Dr. Daniel Johnson remarked.
Mr. Pisarkiewicz also mentioned that the firm will first market the bonds to local institutional and individual investors pending a successful election. These bonds will have a “AA+” rating from S&P Global (formerly Standard & Poor’s Corporation) due to the participation in the State of Missouri Direct Deposit Program coordinated through the Missouri Health and Education Facilities Authority. The interest income from the bonds will be exempt from federal and state of Missouri income taxes, and the bonds will be available in $5,000 denominations.
