MILLBURY — Lake Local School District issued $36 million in bonds to fund the construction of a new elementary school that was approved by voters at the Nov. 2 election, according to a press release issued by Treasurer Monica Leppelmeier.

The district was able to take advantage of very low interest rates, achieving a 3.52% overall interest rate on the bonds that have a final maturity of 2058, she said.

The November ballot issue asked voters to approve a 6-mill levy for the construction of the elementary school, which was based on a 4% interest rate assumption, so at 3.52% residents will see less than 6 mills levied on their tax bill for the new bonds.

The new debt was also structured so that the debt service payments, combined with the debt service for the district’s other outstanding bonds, in total, will not require millage in excess of the 6 mills that appeared on the November ballot.

The bonds were issued with a first call date of June 1, 2027, which will provide the district the opportunity to refinance the bonds at that time should prevailing interest rates provide for sufficient debt service savings.

Leppelmeier said that during the preparation process for the bond issue, the district’s credit rating was upgraded by Moody’s Investors Service from the A2 level to A1, which is above average for Ohio school districts.

As a result of the rating upgrade, interest cost to taxpayers will be $470,000 less over the life of the bonds.

In its report, Moody’s cited that the district benefits from strong resident income, modest population growth and location in the Toledo metro area. The Moody’s report also mentioned that Lake’s financial profile is likely to remain healthy given growing revenues and expenditure controls. According to the credit agency, the district rating could be upgraded in the future if enrollment and financial reserves continue to grow.

Conversely, a downgrade could occur if reserves decrease, and other long-term liabilities increase.

The bonds were sold through the investment banking firm RBC Capital Markets. The municipal advisory firm of Sudsina & Associates LLC and the law firm of Squire Patton Boggs (US), LLP also assisted the district to bring the bonds to market.

Construction of the new elementary is expected to begin in May 2023. The building should open in fall 2024.

The new two-story building will be 110,000 square feet and have 53 classrooms, compared to the current 32.

The new elementary will be a PK-6 building. The existing elementary houses PK-4, with grades 5-7 in the middle school and grades 8-12 in the high school.