For the week of March 20 - 26, 2002

School officials seek bond insurance

---

By DANA DUGAN
Express Staff Writer

Members of the Blaine County School Board and two staff members of the district traveled to New York City last month to meet with several insurance companies and a rating agency.

The insurance is necessary on the school building bond "in case something goes wrong," said Mike Chatterton, treasurer of the school district and one of those who made the three day trip. Chairperson of the board, Claudia Fiaschetti, board member Kathy Pruett and Superintendent Jim Lewis also went on the trip.

The foursome, accompanied by representatives of Seattle Northwest Securities who handle finances of the bond, met with Moody’s Investor Service whose offices are near Ground Zero on Church Street in lower Manhattan. They also had meetings with the insurance companies MBIA, FSA, and Ambac.

The presentation was essentially a sales pitch on the district, Fiaschetti said. They needed to show that the community has a stable economy, and to show the "strength of the school district, and its innovative programs." Ideally, it will help the district get a higher rating which means better interest rates.

The district could either get ratings of A, AA, or AAA.

"We would love to get a double A rating," said Chatterton. "The amount of interest would save us a lot of interest cost."

In order to build the new high school, a Woodside Elementary School, and an addition to the Carey School, Chatterton said, the school district borrowed the money to finance the projects prior to collecting the $4 million a year for the next 10 years.

The way the construction bids came in, it is better to build the elementary school in Woodside, and the addition in Carey sooner rather than later, to save on inflation.

"We wanted to take advantage of the building environment that we have now," Chatterton said.

To do this the board needed to get a rating agency to give a favorable rating, as well as find insurance for the bonds, which Moody’s agreed to give, as long as there is judicial validation. To get this a Blaine County judge must declare the documents legal and above board.

The proposed petition—printed in the March 13 Mountain Express—seeks judicial confirmation of the documents regarding the loan between the school district and U.S. Bank National Association.

"It’s never been done by a school district in Idaho," but other building projects have been able to raise the money up front this way, including the city of Boise.

With the levy in place, the district’s case is stronger since the tax payers already gave their blessing, Chatterton said.

Essentially, the $4 million a year collected by the levy will pay not for the facilities, but will pay off the certificate of participation loan.

 

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.