The Lewiston School District secured funding for constructing a new Lewiston High School while locking in a "really good" interest rate during its bond sale Thursday.
The bulk of the $59.8 million in tax-free bonds sold Thursday, securing an interest rate of 2.97 percent for the project. Nez Perce County buyers had put in orders for $2.5 million of the bonds during a special local sale Wednesday.
The sale brings the school district a step closer to constructing the new school in the Lewiston Orchards to replace the Normal Hill school, built in 1928, and surrounding campus. Voters approved the 20-year construction bond by a substantial 75 percent in March. School officials expect ground to be broken for the project in the spring, with classes starting there in 2020.
Michael Keith, a vice president at underwriting company Piper Jaffray in Boise, said the interest rate the school district locked in means the estimated property tax rate of $1.38 per $1,000 of taxable market value advertised during the bond campaign will stand.
"To be able to borrow for 20 years at under 3 percent is a really good interest rate," Keith said. "This was an important step today. There's no more risk of the district not being able to meet their tax rate goals."
Interest rates were at about 2.75 percent in October when Piper Jaffray representatives consulted with the school district about the likely tax rate, but climbed after the November election. The past couple of months saw rates drop again.
"Our timing was just right," Superintendent Bob Donaldson said. "We're definitely in a very good position to assure our voters that we're at a solid $1.38, for sure."
The Lewiston School Board made arrangements with Piper Jaffray to set aside Wednesday for buyers from Nez Perce County only.
"I thought it went well," Donaldson said of the community sale. "I'm glad that the board made the decision to move forward with that."
Lewiston financial firms D.A. Davidson and Stifel participated in the Nez Perce County-only sale, with Piper Jaffray also taking orders directly. School board President Brad Rice, who works for D.A. Davidson, removed himself from the process, as did Stifel investment representative Scott Baldwin, whose wife Staci is a school board member.
There were 67 buyers in the local sale, Keith said, with orders as small as the minimum $5,000 and as high as $300,000. The rate of return ranged from 0.85 percent for a bond that matures in one year to 3.25 percent for the full 20 years.
While the local sale accounted for only a small part of the total, Keith said, the school board's gesture of including Lewiston School District patrons in the process wasn't unusual.
"I think it was important to them to let the community be involved in this transaction," he said.
Donaldson said it was exciting to see local buyers participate Wednesday and reassuring to see the sale to institutional investors -- such as bank trust departments, money managers, insurance companies and mutual funds -- go smoothly Thursday.
"We're really happy with the outcome," he said.
