Record-low rates benefit ISD $40M bond sale

Issaquah School District took advantage of low interest rates and federal stimulus money to finance ongoing construction project bonds at its March 24 meeting, saving district taxpayers money.

The Issaquah School Board unanimously accepted an offer by Seattle Northwest Securities for the issuance and sale of $29,870,000 in bonds authorized in 2006 and refinancing of existing bonds worth $11,305,000. Issaquah School District CFO Jake Kuper said interest rates had come down dramatically in the past year and locking in the lower rates over a longer period than previous bond issues would reduce the amount residents currently pay for the construction in property taxes.

“This is a direct savings to our community members in the form of taxes they expected, but will not have to pay,” said ISD Superintendent Steve Rasmussen.

Record-low interest rates averaged 3.20 percent on the new, re-financed bonds compared to 5.25% on the old debt. The difference amounts to a savings of over $715,000 during the next eleven years. Rasmussen also emphasized that these savings are not available for District expenses.

The district also benefitted from a low 3.61 percent rate on federally-subsidized Build America Bonds. Created early last year as part of the federal stimulus package, the bonds offer a 35 percent subsidy on paid interest. The ISD estimates it will save $10.5 million over the life of the bond.

“Timing is everything,” said Bob Yeasting, an independent financial advisor for the school district who reviewed the bond sale.

This was the final installment of the $241.9 million bond issue that was approved by the community on Feb. 7, 2006.