Lawrence school board approves $43.5M bond sale
photo by: Nick Krug
The Lawrence school board approved a $43.5 million bond sale Monday, for an interest rate to the district of 3.45 percent.
David Arteberry, of the district bond consulting firm George K. Baum, said the low bidder for the $43.5 million in 20-year bonds offered at noon Monday was Mesirow Financial Inc., of New York City. It was one of eight bidders on the bonds, he said. The bids were very competitive with less than 4 hundredths of a percentage point separating the lowest two bidders, he said.
The sale was the second half of the $87 million bond issue district voters approved in May 2017 to make improvements to Free State and Lawrence high schools, and the district’s four middle schools. The board approved the first $43.5 million in bond sales in September 2017 to Hutchinson, Shockey, Erley & Co., of Chicago, at an interest rate of 2.95 percent for the 20-year bonds — about half a percentage point less than the sale approved Monday. The board split that bond issue in half to lessen the first-year impact on the district’s 2017-2018 bond-and-interest mill levy, knowing interest rates would likely increase before the second half of the bonds were sold this year.
Arteberry said his firm had Moody’s Investor Service re-evaluate the district’s bond rating before the sale. The process reconfirmed the district’s Aa2 rating, he said. That was the third highest rating possible, below Aaa and Aa1.
In the review, Moody’s listed as pluses the district’s strong tax base, the higher-than-average income of its residents and the institutional presence in the district of the University of Kansas to provide economic stability. A challenge that Moody’s referred to on numerous occasions was the district’s spend down of its reserves during the past five years.
In other business, the board:
• Heard a report on school finance from Ann Mah, the District 4 representative on the Kansas State Board of Education. The Supreme Court ruled in June that the $522 million, five-year K-12 school finance increase the Kansas Legislature passed last spring didn’t adequately fund K-12 education as the state constitution required. However, the court said lawmakers could address the shortfall in the 2019 legislative session.
Mah told the board that if the Legislature followed the direction of the state Supreme Court to add more money to the school funding plan to account for inflation, it would add about $90 million a year in the funding plan. She added that the Legislature was unlikely to approve a tax increase needed to provide more funding.
Board member Kelly Jones said that was disappointing and that more money was needed to provide the increased teacher pay the community is vocally supporting.
• Heard from five elementary art or music teachers and one parent urging the board to agree to a Lawrence Education Association proposal for the 2018-2019 teachers contract to cap at 18 to 20 the number of sections elementary school music, art and physical education teachers teach. Deerfield Elementary School art teacher Hannah Hurst and music teacher Sara Bonner said that because of enrollment at the school this year, they were teaching 21 sections. Teaching that many sections was unfair to students and teachers, they said.
• Recognized Kathleen Lane, a KU professor of special education, with the district’s Outstanding Service to Public Education Award. Lane has worked with the district to implement its three-tiered level of support to help students with emotional, social and academic issues.