Public Schools of Petoskey sells bonds for safety and security projects

PETOSKEY — After the Public Schools of Petoskey's bond proposal passage, the district sold the bonds last week.

Last November, voters approved an $18.1 million bond proposal to make safety and security upgrades throughout the district. Seventeen bidders attended the sale via Zoom, with KeyBanc Capital Markets being selected to purchase the bonds.

“They were blown away (at) just the sheer amount of interest,” Superintendent Jeff Leslie said during the Tuesday, March 19 board of education meeting. "We’re a darn safe bet for these companies.”

The interest rate the district was given was 2.876 percent. The district's financial consultants, PFM, originally projected a 4.25 percent interest rate.

During last week's board meeting, the district's Director of Finance Bill Melching said the expected payback with the interest rate will be more than $2 million less than what was originally projected.

Melching said that when in the process of going out for bond, financial advisors offer a projection, and the estimated payback amount was going to be $23,732,104. Based on the 2.876 percent interest rate, the actual payback rate will be $21,712,042.

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The interest rate of 2.876 percent “is a really great interest rate in today’s market,” Melching noted.

In addition to projections on payback rates, the financial advisors did an estimation of money that would go into the construction fund after fees, like paying the underwriter and bond council, for example. The financial advisors projected that $17,948,802 would enter the construction fund, but the district will actually receive $18,039,765, nearly $91,000 more than what was originally projected.

The $18 million construction fund deposit does not include any additional money the district could make through investments.

Now that the bonds have been sold, the district has three years to spend 85 percent of the money, which will be used to bring safety and security upgrades throughout the district, including secure vestibules, adjusting internal and external doors and hardware, offering temporary software and more.

— Contact reporter Karly Graham atkgraham@petoskeynews.com. Follow her on Twitter at@KarlyGrahamJRN.