School board refinanances bond loan
June 12, 2008 · Updated 9:34 AM
With the failed school bond several months past and another attempt several months perhaps more than a year away, the South Kitsap School District had a few more lose ends to tie up Wednesday evening at its regular board meeting.
Before the special election ballots landed in the mailboxes of South Kitsap voters earlier this year, the district took out a $3 million loan to purchase the property that would be used to construct a new high school and, eventually, a new junior high.
The loan was taken assuming the $163.2 million bond in March would pass, but with only 53 percent approval bonds and levies require 60 percent the district was left with the property and a loan intended to be short term.
On Wednesday, the board approved refinancing the $3 million note, securing a fixed 4.5 percent interest rate and options to make payments on the principal. The loan also has no penalties in the event a future bond passes and the district pays the entire owed amount.
The original loan from Key Bank called a bond anticipation note line of credit was at a variable interest rate, which has remained below 5 percent since July 2004.
Payments on the loan were for the accrued interest only, because the bond would have paid the loan much sooner.
The districts refinancing transferred the loan to All Points Public Funding, a Capital One company.
The district plans to keep the property and will begin making payments on the principal, averaging $294,000 yearly. The payments will come from impact fees revenue acquired from developers when they build in the community dedicated to capital improvements.
The $163.2 million bond was meant to pay for a new high school, rebuild South Colby Elementary School and improve technology infrastructure, roofing, heating and cooling systems, and physical education and athletic programs.
The board cited South Kitsaps sticker shock from non-voter-approved tax increases from the Port of Bremerton District as one reason for the failure.
After the bond failed, the board said the new high school is still needed, and said the bond would be put to the voters again at an unspecified date. Since then, the board decided to delay the bond until after the election in November.