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Tax rate increase for 2016 bond smaller than projected

Lake Stevens School District (LSSD) voters generously approved a $116 million bond measure in February 2016 with an estimated tax rate increase of $1.21 per $1,000 of assessed value. LSSD recently sold its first series of bonds and locked in a favorable interest rate, with an estimated increase of $1.02 per assessed value.

“We were pleased to take advantage of historically low market interest rates for the bond projects and to prioritize cost-efficiency for our taxpayers,” said Teresa Main, Assistant Superintendent of Business Services. “In fact, we decided to increase the size of the 2016 issue from $58 million to $78 million to lock in that low rate on more of the authorization.”

The $1.02 per thousand estimated bond tax rate increase takes into account a preliminary 2017 figure for the taxable bond assessed value within the District, provided by the Snohomish County Assessor. That preliminary figure showed growth of 9.7 percent over 2016, contributing to the tax base’s ability to repay the new debt with a smaller rate increase. The actual bond tax rate increase depends on the final 2017 taxable bond assessed value, which could vary as appeals are processed.

LSSD plans to issue the remaining $38 million of the authorization in late 2017.

D.A. Davidson & Co. in Seattle served as senior managing bond underwriter for the District’s 2016 bond issue, which used $78 million of the bond authorization. The District’s bonds were sold on June 16, when U.S. municipal bonds enjoyed low interest rates amid investor uncertainty about the approaching June 23 Brexit vote in the United Kingdom. The District’s 2016 bonds have an interest rate of 2.46 percent.