School board considers options for issuing bonds

The Whitefish School Board is prepared to make quick progress in starting projects to update Whitefish High School and athletic facilities.

The 60-day window to contest the school bond election ended Nov. 16 with no contestations reported. The school board adopted a resolution officially acknowledging that the bonds have passed and is now in the clear to move forward with the project.

The district is currently in the process of interviewing architects and an owner's representative, and will make final selections at its Dec. 10 board meeting.

Trustee Shannon Hanson said that each member of the committee conducting interviews has brought a different perspective.

“As a committee member, how we collaborate has been fulfilling in a way. It’s a lot of time and a huge decision... but we will be able to look back and say we were thorough,” Hanson said.  

Hanson said he’s been impressed with the quality of applicants the district is reviewing. 

“I think we’re fortunate for that, Trustee Katie Clarke added. “And I also think it’s a reflection of our district being good to work with and well prepared. 

D.A. Davidson of Flathead Valley was selected for bond issuance council and is preparing to make a recommendation to the district on a resolution for how to go about issuing the total amount of $32.6 million for both the academic and athletic bonds.  

The financial advising firm has “experience in public financing, and in particular public bond issuance,” said District Clerk Lucie Shea.  

D.A. Davidson previously worked with the district for other school improvement projects. 

The financial time schedule will become more finalized after the selection process for the architects and owner's representative, as those selected will be consulted.  

The preliminary plan is to have bonds in $5,000 increments that will be sold as a tax-exempt investment. There will be about 6,000 bonds available to purchase. Public notices will be published in local newspapers informing people when they are available around early February.   

“One of our first decisions is to think about if we want to issue the bonds all at once,” said Bridget Ekstrom of D.A. Davidson.  

Issuing the bonds upfront will maximize profit and minimize interest costs, according to Ekstrom. 

“We think the premium will come in at about $2.7 million. And the current rate on investment is around 3.5%. So if all $32.6 million was invested in one year, we would have a little over $1.1 million  to add to the project,” Ekstrom said.  

In 2017, bonds for Muldown Elementary were issued all at once. In 2012, the high school bond was issued over two series.  

“There’s pros and cons to issuing all at once, and we will explore those fully as we move in. We want to be able to certify at the closing of the bonds that we can expend 85% of bond proceeds in three years, so we’d be looking to achieve and close the bonds in early 2028,” Ekstrom said.  

“Montana bonds are in high demand. There are not a lot of tax advantaged investments for people in our state. We will likely have good results locking in good interest rates, and we’ll be able to earn some investment earnings,” Ekstrom said.  

With the high demand in Flathead County, “A-plus credit rating for the district, and current national trends, we think the yield issue will be driven down, which increases the price – which means people will be willing to pay a higher price for the bond,” Ekstrom said.  

That higher bond premium will go directly to the district and the projects, and it will be up to them to decide what to do with the funds.  

“There will be a lot of decisions to make regarding what to do with the bond premiums and the additional interest earnings as the project goes on,” Ekstrom said.  

Based on preliminary numbers and approximate bond premiums, taxpayers can expect to see an increase of 13.34 mills in 2026, covering both the academic and athletic projects. That is slightly less than the projected 13.73 from the mill levy impact analysis that was available to voters back in August as they made their decision to approve or reject to bonds.  

Mills are a property tax that fund schools and public services. One mill is equivalent to $1 per $1,000 of assessed value. The levy was 15.38 mills in 2019 and 5.792 mills in 2024.  

There are seven years of debt payments remaining from the 2012 Whitefish High School building project. Those debts are to be balanced out with the new mills, so Whitefish School District taxpayers are expected to pay a level three million every year for the next 20 years.  

However, due to new constructions and the expectation that home values will appreciate, over time each taxpayer’s share will likely decrease a little every year.  

“It’s not just inflation. It’s new construction. In general, each time we have had a property reevaluation in the district in the past, values have jumped,” Ekstrom said.