Update on Brisbane School District Measure K

BY: Ronan Collver, Superintendent rcollver@brisbanesd.org

Thank you to the voters in our district for the overwhelming approval of Measure K!  These bonds will provide the district with the necessary funds to modernize, repair, and enhance one of our community’s greatest assets, our public schools.  The Brisbane School District appreciates the support you have shown us and we welcome the chance to provide better, healthier, and modernized facilities for the children in our community.

On May 6th, Brisbane SD successfully priced its first series of bonds under the Measure K authorization.  After two months of increased volatility due to concerns about COVID-19, the municipal market environment has significantly improved in May.  The District was able to take advantage of this favorable market environment to lock in interest rates on its Series A bonds.

The summary table below compares the final pricing results against the good faith estimates provided to the Board on April 22nd.  Compared to the earlier estimates, the true interest cost (TIC) on the Series A bonds is approximately 53 basis points (0.53%) lower and the total payment amount for the Series A bonds is nearly $1.3 million lower over the life of the bonds.   The improvements are even larger when compared against the estimates from the bond election.

Estimate Final
True Interest Cost 3.85% 3.32%
Total Finance Charge $214,000 $193,750
Total Proceeds Expected to be Received $8,840,000 $8,840,000
Total Payment Amount $17,147,406 $15,882,348
Repayment Ratio 1.91 to 1 1.76 to 1

The District worked with the underwriter, DA Davidson, as well as our financial Advisor, Isom Advisors, during the pricing process.  Comparable sales information was reviewed and analyzed to ensure that the pricing levels were favorable. The order period was very successful; more than 29 different investors participated in the bond sale generating over $45 million in orders.  The high demand allowed the District to negotiate lower borrowing rates on the Series A bonds.

The Series A bonds has a total par amount of $9,000,000 and are structured entirely as traditional current interest bonds with a 30-year repayment term.  The total debt service associated with the Series A bonds will be $15,882,348, assuming no optional redemptions.  The current repayment ratio on the bonds is 1.76 to 1, well within the statutory requirement of 4.00 to 1.  The Series A bonds will close (and the District will receive the bond proceeds) on May 13th.

A RFQ(Request for Qualifications) was published and qualified architects have been submitting bids over the past few weeks. The Board of Trustees should finalize the bid selection at its May 20th Board meeting. The District is very excited to have the opportunity to improve and modernize all of our facilities and we are very grateful for the support of our community.