School Board Sells Millions In Bonds
FARMINGTON — Farmington School Board received two bids to sell $29.5 million in refunding and construction bonds and approved a low bid of 3.69 percent interest rate from Robert W. Baird & Co., Inc.
Kevin Faught with Stephens Inc., of Fayetteville, said the firm had hoped to receive more than two bids for the bond issue but believes overall, the school received a good bid.
“Bond rates are on a roller coaster,” Faught told board members at their Aug. 27 meeting. “They are up and down. They were up a little when we did our sale.”
Voters in the May 22 school election supported the school district’s request to refinance five bond issues and extend debt another 35 years. The district refinanced five issues that totaled $19.4 million in principal and offered a new bond issue with a principal amount of $29.5 million.
The new issue includes $9.3 million in new money that will be dedicated to Phase 3 at the high school, with some leftover for projects at what is now Farmington Junior High.
Bryan Law, superintendent of schools, said the sale generated more revenue that expected.
“All in all, this is good or better than what we hoped for,” Law said. “We were very happy that day.”
The proceeds from the sale will be available to the school Sept. 4. Bond trustee will be Bank OZK in Little Rock.
The first payment will be due February 2019 and the district will make two interest payments and one principal payment each year. The annual debt service for the new bond issue will be about $1.63 million for principal and interest, according to Faught. Faught said this debt service is about the same payment the district was making for the five bond issues that were refinanced.
The total cost for Phase 3 will be $15.9 million, which includes $1.2 million for site work and $11 million for the base facilities package: new football/soccer stadium, track, football bleachers, pressbox, concession stand/restrooms, ticket
booth and a field house with offices, locker rooms and a weight room.
Another $2.7 million is for an indoor practice facility and cheer/dance locker rooms, $700,000 for the utility package and $318,000 for other costs, such as bleachers and a pressbox for the track facility and two parking lots.
The district is financing Phase 3 with proceeds from the new bond issue and money from its capital improvements reserve fund.
In other action, the School Board approved the 2018-19 school budget, which is very close to the budget for 201718, said Mandy Uher, district treasurer.
The budget shows a beginning balance of $748,325 with expected revenues and projected expenditures of almost $21 million.
Projected revenues include $12.6 million from the state in state equalization aid, $5.6 million in property taxes, $925,000 from Act 79, $444,470 from National School Lunch Student funding and $300,000 in delinquent taxes.
Projected expenditures include $10.3 million for the teacher salary fund, $3 million for benefits for certified and classified staff, $1.3 million for operation expenses, $1.6 million for classified salaries, $864,723 for utilities and insurance, $547,000 for custodial fees and $478,041 for maintenance.
The budget also includes transferring $167,000 at the end of the year to the district’s capital improvement fund, leaving an expected year-end balance of $749,105.
In other business, board members, after much discussion, approved a recommendation from Law to lease a new band truck for the next five years instead of purchasing a truck.
Law said school officials have looked for a band truck to purchase but costs are high on vehicles with lots of mileage.
The school will rent a 26-foot truck for $1,230 per month for five years. At the end of the period, it will have the option to purchase the vehicle at market value. The agreement includes maintenance on the truck and 24-hour emergency road service.
“I’m typically not a leaser myself but I’ve had to weigh this,” Law said. “With this situation, it seemed like the best option.”
Board member Doug Williams agreed he did not like to lease but added, “Sometimes you have to bite the bullet.” Williams noted a lot of people were depending on the truck and timing seemed important to get something in place for the band program.
Workers with NEC Inc., of Rogers, work on the long jump for the new Farmington High School track. The School Board last week accepted a bid for a new bond issue, with part of the proceeds from the bonds dedicated to helping pay for Phase 3 of the high school campus.