With a big question mark — voter approval — now settled, the Lansing School Board Tuesday authorized the district’s investment bank to move forward with the next steps related to a $73 million bond issue.
With a big question mark — voter approval — now settled, the Lansing School Board Tuesday authorized the district’s investment bank to move forward with the next steps related to a $73 million bond issue. Greg Vahrenberg, of Piper Jaffray investment bank, presented information the firm had gathered on the bond issue passed by voters last week, which will fund a new high school, athletic facilities and improvements to the district’s existing high school, retrofitting it to become a new middle school. Vahrenberg said he expects the bonds themselves to be issued just before the end of the year, around Dec. 20. The issue as approved will result in $73 million in bonds, to be paid off over the next 25 years. Interest and other costs related to the issue, according to Vahrenberg, will add another roughly $69 million to that number, though state aid for bond and interest will cover 41 percent of total principal and interest payments, or an estimated $72 million. The new bonds will be bundled with some of the district’s current debt, which is being refinanced at a lower interest rate for an expected savings of about $195,000. The payments, he said, were structured to remain static over the life of the bonds. “We’re putting you in a position where we don’t have any year where we have a jump in the payment or a larger payment that may put pressure on that mill levy,” he said. That estimated tax levy for bond and interest, Vahrenberg said, is still expected to increase from about 9 to 21.50 mills as a result of the new debt payments. However, he said there have been indications that the district could have more flexibility than once thought because of healthy bond and interest fund balances. “When I look at this, I do believe that the district might be able to set that lower than what was represented to voters during the campaign,” he said. Amidst the number and financial jargon, Vahrenberg said there was a message for the board. “I think it’s good news from the district’s perspective,” he said. The board approved a resolution authorizing Piper Jaffray to work with bond attorneys at Gilmore Bell.