Bond sale rate to lower taxes

Amherst Exempted Village Schools officials say they are pleased with the results of $8.45 million of bond sales for an elementary school building project.

“Our rates came in extremely good,” said Treasurer Barb Donohue. “With the first bond sale (May 2) the rate was 3.21 percent. This bond sale (May 18) it was 2.98 percent. It sold quick. It was great for us but not good for investors.”

A simple action such as a Tweet on social media can change market conditions, she said.

“The market moves on what happens,” Donohue said. “I was kind of worried when Elyria’s bonds sold so quickly, but it worked out for us.”

The school board met for about four minutes May 25 at the board office to pass legislation regarding the bonds.

“We issued two sets of notes,” Donohue said. “The first was to get the building project started. We had local funding initiatives we needed to provide money for, so we did two sets of notes.

“We also had to have our local share for the state before we could sign a project agreement,” Donohue said, “and selling the notes allowed it to go forward.”

When the district planned for the bond sales and the bond issue to place before voters, the pricing was based on what they knew to be true, she said.

“It’s hard to tell with the market going high and low,” Donohue said. “When we were estimating interest on bond sales, we estimated it at 3.75 percent. We tried to be conservative with our property

“We know this will take off, likely, three years from the length of the levy, and it also will decrease taxes. Fortunately if the property values are at what they are now, or if they increase, it should decrease taxes.”

— Barb Donohue, treasurer of Amherst Exempted Village Schools

values and our interest rates.

“The days our bonds sold the market was good,” Donohue said.

After they estimated 3.75 percent interest, the actual rates lined up at 3.21 percent and 2.98 percent, she said.

“We haven’t got the final outcome,” Donohue said. “We know this will take off, likely, three years from the length of the levy, and it also will decrease taxes. Fortunately if the property values are at what they are now, or if they increase, it should decrease taxes.”

The planning for this moment began two or three years ago, she said.

“We started with refunding the old bond that was on the books,” Donohue said. “When they did the bond issue in 2004 with the junior high, they passed the bond for 30 years. But it capitalized at 27 years. We stretched it out three more years. We were able to attach it onto the new bond and only add 12 more years.”