Hancock School Board readies for bond sale
The Hancock School Board is expected to award the bid on Jan. 28 for the sale of about $7.8 million in bonds to pay for an addition to the school.
The board approved at the Dec. 17 meeting to sell the bonds and select a bidder on Jan. 28. Kelly Smith of Springsted, the school's financial consultant, said the company will accept bids during the day and bring a list of bidders to that night's meeting.
"I anticipate we will see five to 10 underwriter groups bidding on this," Smith said. He expected that all bidders would be familiar to Springsted and be financially solid bidders.
Several school board members asked Smith if the school district's financial rating could improve before Jan. 28. The district has a rating call with companies who rate the district's finances on Jan. 15.
Bidders use ratings to make decisions on bidding on bonds. The Hancock School District has an A1 rating while the state of Minnesota has an AAA rating, which is a higher rating. Smith said an A1 rating is good but it does not fully reflect the school districts sound financial state. "You have a very strong financial position," Smith said. Yet, he doesn't expect the school district's bond rating to improve from A1 because the district is small and it is mainly reliant on one segment of the economy.
"We've always been reliant on one segment," board member Tim Schaefer said.
Smith said that is true but compared to prior years, the financial community is placing more emphasis on that factor.
Smith said the A1 rating in the same rating the district had in 2013 when it built an addition to the school.
The district will also be helped because the state's rating is AAA, Smith said, because the state provides education aid to the school district.
The sale of bonds is a step in the overall process before construction starts in 2019.
Smith said the district is at about the same place as several other school districts the company is working with. Those districts also have voter-approved referendums for building projects.