At the regular board meeting held on December 17, 2013 the board voted on, and passed, three resolutions that approve the sale of notes and bonds. This is the financial part to proceed with the new facilities.
Resolution #1 - This resolution approves the sale of $8 million dollars in notes.
- This allows the district to move forward financially with the project.
- Issuing the short term notes before the end of the calendar year allows the notes to be designated as “Qualified Tax Exempt Obligations”
- Why is the district issuing short term notes and not bonds? Issuing notes for a short time allows the district to obtain a lower interest rate which is projected to result in a $250,000 to $350,000 savings in interest.
- If it saves money why isn’t the district issuing more notes? A school district can only issue up to $10 million dollars in notes in a calendar year. NRCS had to issue $1.8 million in notes early in 2013 because of financial difficulty (this was before the collection of the new operating dollars started). That left $8.2 million dollars of notes the district can issue now.
Resolution #2- Approves the sale of bonds in the amount of $50.1 million dollars.
- Issuing these bonds in January will take advantage of the low interest rates minimizing interest expense.
- These bonds will work similar to a loan. NRCS uses the money generated by the bonds to pay for the costs associated with the new facilities. The bonds are paid back semimonthly over a 34 year period similar to a home loan.
- These bonds will be issued and sold at the end of January.
Resolution #3- Approves the sale of bonds in the amount of $8 million dollars.
- This resolution allows the short term notes that were previously issued to now be converted into bonds.
- These bonds work the same way as the bonds in resolution #2
- These bonds will be issued and sold in the middle of February.