Bond sales could save Edmonds School District $17 million if rate projections continue

Hilltop Elementary School principal Melissa Somosa (left), with the school’s co-student presidents.

Edmonds School Board members during their March 26 meeting voted unanimously to sell up to $320 million in different types of bonds. They also heard from Hilltop Elementary School about its school improvement plan.

The board agreed to sell $200 million in unlimited tax general obligation bonds (UTGOB) and up to $120 million in refunding bonds, which voters approved in February. Over 65% of voters approved each proposal.

According to the Municipal Research and Services Center (MRSC), unlimited tax general obligation bonds must be approved by 60% of the voters, with a voter turnout equal to at least 40% of those who voted in the most recent general election.

When the voters are asked to approve the issuance of these bonds, they are simultaneously asked to approve an excess levy that raises their property taxes to cover the debt service payments. 

UTGOB can only be used for capital purposes and does not permit equipment replacement.

The stipulations for selling the bonds are as follows:

– The true interest cost cannot exceed 5.5%

– The coupon interest rate for the bonds cannot exceed 5.5%

– The refunding bonds are sold for a price that results in a minimum net present value debt savings over the refunded bonds of at least 1%.

MRSC explains refunded bonds as bonds with the principal cash amount held aside by the original debtor.

This graphic shows the current refunding of the district’s 2014 bonds.

This resolution authorizes Superintendent Rebecca Miner or Executive Business and Finance Director Lydia Sellie to enter an unlimited general obligation bond purchase contract to refund the $119.085 million from the series of unlimited general obligation bonds in 2014.

Before the vote, financial advisor Mark Prussing of ESD 112, bond underwriter Trevor Carlson of Piper Sandler and legal consultant Deana Gregory of Pacifica Law Group presented the bond sales plan and projections.

According to Prussing, it is a good time to sell bonds, and other school districts saw success with such sales earlier in the year.

He explained that the average coupon and interest rates were just under 5% and that “with current rates, we could get that down to below 3, and this analysis was 2.6%.” 

“If we’re able to achieve those rates, it’s over $17 million in savings to district taxpayers,” he added.

The current interest rates closely match those when the plans to sell bonds started in 2018.

Carlson said that the interest rate environment is very similar to when the plan to sell the bonds was started in 2018.

The bonds will be sold over the next two years, totaling $594 million – $200 million in 2024, $200 million in 2025 and $194 million in 2026.

Gregory explained that, if the board approved the action, the financing team would finalize legal and other documents in April and hold a conference call with a credit rating agency April 25.

If the goals are met, the financing team will proceed with the bond sale May 22, and the school board directors will be updated on the results.

June 5 is the bond closing date. This is when the new bonds are issued to the investors.

School board members had no questions for the presenters.

In other business, Hilltop Elementary School Principal Melissa Somoza and Co-Student Council Presidents Amilia and Hana gave the presentation for their school.

Somoza explained that the teachers and students worked together to develop  their vision statement: “To create a safe, inclusive learning environment for everyone, where students respect themselves and others, learn compassion, and become empowered scholars.”

The student council organized service projects such as the school’s annual food drive and held Spirit Days with themes like Pajama Day and Fake Mustache Day.

The school council presidents explained that these activities increase a sense of belonging among students. 

This inclusion is also felt through the school’s safety patrol, which greets students as they arrive. In addition, through the Husky Helpers Program.  fifth- and sixth-grade students assist primary students at recess and participate in Buddy Classrooms to build cross-grade connections.

Beyond the classroom and playground are the school’s Spirit Assemblies and the Multicultural Night, which the students noted as their favorite events.

The Multicultural Night features performances from students and a potluck dinner.

The co-presidents explained that the school’s PTSA has helped students create learning and volunteer opportunities in the community and has provided grants to assist in funding the student council’s activities.

When Board President Nancy Katims asked how the school developed its ideas for Spirit Days, one of the student co-presidents explained that the classroom representatives take student ideas and report them to the council.

Principal Somoza’s school improvement plan report for Hilltop Elementary School followed the student presentation.

Total student enrollment has increased at Hilltop Elementary School.

Somoza said that Hilltop – located in the district’s northeast quadrant – is unique in that its population is growing, which she noted is not the trend across the school district.

She said the school has grown by two classrooms over the past two years. 

“Our recent kindergarten cohorts have had 90 to 100 students, and we already have 62 students registered for kindergarten this fall,” Somoza said. “With that, Hilltop is becoming more diverse in both race and ethnicity.” 

With the increase in students also comes a more diverse student body.

She said that the staff is working to be thoughtful about creating an inclusive learning environment through their interactions with families, selection of materials and professional learning. Further, the staff extended inclusivity to other forms of diversity in the school community by finding ways for students to be proud of their identity.

“While belonging is at the heart of what we do and so deeply tied to both our school and district mission, we chose to share our reading goal,” Somoza said. 

She explained that reading creates a path to being a scholar and developing empathy and advocacy, which is a part of the school’s mission.

The school’s reading goal for the past three years is that by spring 2024, the percentage of students grades 1-3 who meet grade-level reading standards will increase from 66% to 78%, as measured by teacher college running records.

The staff are using two strategies to catch students up to grade-level standards.

 Strategy 1: Consistency, alignment, and implementation of guaranteed/viable core reading curriculum: Units of Study and 95% Core.

– Resources, including student books and decodable texts

– Required and optional professional learning

– Team collaboration and peer observations

Strategy 2: Systematic daily intervention groups for first- and second-grade classes, coordinating the use of Learning Assistance Program, Machine Learning, and Special Education staff to target each student’s foundational reading skill progress.

– Master scheduling and daily intervention

– Small clusters of students with like needs

– Collaboration between teachers and interventionists

– Collaboration among interventionists

Somoza explained that more than half of the students who were two or three grade levels behind had already made more than a year’s worth of growth, with special education and multilingual students also exceeding expected growth.

Also during the meeting, the board of directors passed a motion to adopt the new Biology Core curriculum presented on March 7.

The next board meeting will be at 6:30 p.m. Tuesday, April 23 at the district’s Educational Services Center, 20420 68th Ave. W., Lynnwood, WA 98036. 

You can watch the meeting online by clicking here.

To view the meeting agenda, click here.

— By Rick Sinnett

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