School district finalizes bond question it will take to voters

Any changes must be made before September 5

On the first day of classes at the Crested Butte Community School, students surged back into classrooms and hallways, with as much force as they’d exited last spring. As the lunch hour came, backpacks were scattered in the hallways and students begged for late passes to classes they “couldn’t find.”

Heavy wooden tabletops in the industrial arts room, scarred by 12 years of shop classes, waited with heavy coats of fresh varnish for the first pupils to arrive. But students wouldn’t be making clocks. Instead, science, math and ecology classes were taking over and the saws and sanding blocks were relegated to half the space at the other end of the room.
Such is life when 509 students show up for classes in a school made for 350 students.
Just hours after the school day ended at the Crested Butte Community School, the RE1J school board met in its multi-purpose room to revise and approve the language of a bond question. If passed, it would give all of the district’s schools, including the Crested Butte Community School, needed renovations and expansions.
“Now the hard work begins,” said school board president MJ Vosburg, referring to the task of campaigning for the support of the people.
The opening language of the question leaves nothing to surprise, telling voters in the first paragraph that the district is seeking approval for a $55 million bond that will be paid off at $4.9 million annually, for a total cost to taxpayers of $110,665,000.
“The duration of the bond is 25 years,” said Todd Snidow, a senior vice president with George K Baum & Company, which is overseeing the bonding process for the district. “But you can easily knock three or four years off of that by refinancing and budgeting to retire some of that debt early.”
The question then lists some details of the projects that the bond will pay for, like the addition to the Gunnison High School and its expanded fine arts areas, athletic facilities and the moving of the vocational building.
Also included in the question are the 16 additional classrooms, a gymnasium and other areas that are part of the changes being proposed for the Crested Butte Community School to accommodate the growth of the student body and eliminate the two modular buildings used by fourth and fifth grade.
The question over what plan would be used at the Crested Butte Community School was finally laid to rest after the board visited the Crested Butte Town Council. The Town Council debated adoption of a resolution to pursue an intergovernmental agreement, or IGA, allowing the school to expand onto the adjacent town-owned ball field.
The Town Council voted unanimously to pass the resolution, ending a period of uncertainty for the school board. The bond will include up to $1 million for the timely relocation of the ball field and all of its facilities.
The board then continued revising the bond language to make the desired impression on voters at the polls November 4.
In an explanation of the bond process, Snidow said if the measure passes, George K Baum & Company, an investment bank that specializes in the passage and sale of municipal bonds, would move to sell the bonds in early December when the bond market heats up.
“We would start looking at the market around the end of November until about 10 days before Christmas when [market activity] just drops off… If the markets don’t look favorable at that point then we can hold off until January if we need to,” he said.
The interest rate charged on municipal bonds is fixed at the time of the sale and if the rate is too high when the bond is sold and drops over the life of the bond, then Gunnison County tax payers will be paying more than what the bond is worth. Due to that possibility, Snidow asked the school board to consider three different interest rates that are above the current interest rate and no higher than 6 percent.
According to Snidow, with the “craziness” in the market this year, “We will have to keep a close eye on the market to make sure we get the best rate we can get.” If the rate is too high when the bond is sold, “the board is mad at me, the taxpayers are mad at me and I don’t want that.”
When the time is right, the bond will go on an open market, like Standard & Poor’s, to be bid on by money managers, retirement funds and similarly large investors. Snidow said for them, a municipal bond from Gunnison County would mean a relatively safe investment, because repayment draws from a diverse tax base.
“In a county where a majority of the tax base comes from a single industry or enterprise, a bond would not have the same security as it does from a place like Gunnison County. If that one industry goes away, so does the tax base. But here, if one thing goes away there are other businesses that can pick up some of the slack,” he said.
The biggest issue facing the bond is the clutter, created by the many other bonds that are expected to go on the market this year. So far, Snidow said there about $2 billion in bonds being sought by municipalities in Colorado this year, which is a record. The previous record was set in 2006 when $1 billion in bonds were issued.
The board can change the language of the bond until the September 5 certification date, when it will become final.