A bond sale creating more than $10 million worth of revenue to help pay for new school construction sold out in one day, the Morgan County Board of Education was told on Wednesday, Oct. 2.
According to Bryce Holcomb, Jr. director, public finance department, Citigroup, the sale of municipal bonds “went so well we had three to four times the orders that we had bonds to sell,” he told the board.
The bond sale was the second component of of more than $25 million bond issuance the board is using to partially fund the school’s ambitious $46 million construction of a new Morgan County High School and new Morgan County Middle School.
Holcomb said the bond issuance should create more than $28 million towards construction of the schools.
Dr. James Woodard, superintendent, Morgan County Charter School System, said repayment of the bonds is backed by Education Local Option Sales Tax (ELOST) referendums that have been approved by Morgan County voters.
Woodard said the collections generate approximately $3 million per year and has been rising with an invigorated economy.
Holcomb said the school system had earned a AA minus credit rating with investors in part because of what he said researchers deemed the system’s management team strength, the strength of the Morgan County economy and “overall debt as a percent of market value is low…” Typically, he said, school systems generate a single A credit rating with bond issues.
The bond summary stated that Morgan County’s “district median household effective buying income is 99 percent of the national average, which we consider good. It’s per capita effective buying income is also good at 93 percent of the national average.”
“Market value totaled $2.6 billion in 2018 which results in a per capita market value of $144,525 which we consider strong.”
Holcomb praised the board at a special called meeting to adopt a resolution to accept the bond issuance.
“You’ve got great management, a great board, great reserves and you’ve got a great local economy,” he said.
Holcomb said prior to issuing the bonds, Citigroup works with local data to determine obtainable interest rates. “They really do kick the tires and look under the hood when they do these ratings.”