FARMINGTON --Farmington School District will start 2017 with an additional $3.5 million in its capital improvements fund that will help get Phase 3 of the high school campus "out of the ground," said Bryan Law, superintendent of schools.
In a special meeting Friday, Farmington School Board approved a resolution to accept the low bid to issue $3.5 million in second-lien bonds.
The board also voted to purchase 5 acres at a net price of $100,000 from former Judge Michael Mashburn. The property is adjacent to the northwest corner of the new high school campus on Highway 170 and will be used for Phase 3.
The district received bids for the second-lien bonds from three investment firms on Dec. 12. The board accepted a bid submitted by Ross, Sinclaire & Associates with an interest rate of 2.9 percent. Of the other two bids, one was a 3-percent interest rate and the other a 3.25-percent interest rate.
Kevin Faught, senior vice president with Stephens Inc., said the board made a good decision to open bids before the end of the year.
Faught said he expected interest rates would be around 3.12 percent and was pleased to have one below 3 percent.
"I think we got a pretty good bid," Faught said. "Since the November election, bond interest rates are up a full percent...We've seen wild swings and volatility in the market."
Bond rates dipped somewhat around Dec. 8 and that is what helped Farmington's rate, Faught said.
The proceeds sheet shows Farmington will receive net funds of $3,521,346. Fees and costs of the bond issue will be almost $50,000 for the underwriter's discount, $26,000 for the financial advisor's fee and almost $7,000 for bond counsel's fee.
The money will be wired to the school district after the transaction closes on Dec. 28
The bonds will allow the school district to get started on Phase 3 and the final athletic facilities to wrap up the high school, Law said. Phase 3 includes a football/soccer stadium, fieldhouse, separate track facility, indoor practice facility and parking.
Hopefully, Law said, the district will have money leftover from Phase 2 and this can go toward the last phase.
"This is our best attempt to get it started and out of the ground," Law said.
The additional 5 acres will allow the school to spread out athletic facilities and give space to build the track separate from the football field.
School officials have gone back and forth with Masburn trying to reach an agreement on a purchase price. Law said he received word last week that Mashburn indicated he was ready to sign the papers for the sale.
The district will purchase 5 acres for $25,000 each and then Mashburn will turn around and issue a $25,000 check to the school, Law said.
"The judge is concerned about the sales price and future sales," Law said.
Law recommended purchasing the land at that price.
"To be honest, that price is better than I thought it would be in the beginning," Law said.
The school wanted to purchase 6.4 acres but Law said Mashburn was only willing to sell five.
"I wish we had one more (acre) but we don't," Law told board members.
Board member Doug Walker said he thought $20,000 per acre was a generous price.
General News on 12/21/2016