Rochester Community Schools’ Bonds Sell at a Premium

The Rochester Community School District Series II bond sale resulted in the second largest competitive sale nationwide.

The district received six proposals for the bonds with true interest costs (the actual costs of taking out a loan) ranging from 2.85-2.98 percent. Bank of America was the successful bidder which included a premium in the amount of approximately $971,800. The face value of the bonds totaled $56,025,000.

“The Board’s vision and long-term commitment to the strategic plan and sustainable instructional and operational programming positioned the district for a successful Series II bond issue,” said Superintendent Robert Shaner, Ph.D. “Positive investor participation in the bond sale resulted in an advantageous outcome for district taxpayers.”

In 2015, voters residing in the greater Rochester area overwhelmingly approved a $185 million bond proposal to fund critical infrastructure and technology enhancements across the district and improve student safety and school security. In March 2016, the Board of Education authorized the sale of $128 million in building and site bonds. The remaining sale of the $57 million in bonds was approved by the Board in March 2019.

Several factors contributed to a successful bond sale. They include right-sizing the organization, establishing sound business practices, increasing the operating fund balance to 17.75 percent of the expenditure budget, and upgrading the district’s credit rating.

The district’s credit rating recently increased from AA- with a positive outlook in 2016 to AA with a stable outlook in 2019. “A good credit rating is important because it demonstrates that we are less of a risk for our investors. This allows us to then borrow money at a lower interest rate, which is great news for our taxpayers,” said Dana Taylor, deputy superintendent of business affairs.

“The sustainable stewardship provided by our Board of Education continues to forge a legacy of excellence for both current and future students,” said Dr. Shaner. “I am proud to serve with such a high-functioning team who provides outstanding service to the students of our community.”