WATERLOO — Hawkeye Community College is selling $6 million in general obligation bonds as officials prepare to move forward on voter-approved projects.
The Board of Trustees Tuesday approved the sale to Raymond James & Associates of Dallas at a price of $6,138,765 and an interest rate of 0.81 percent over three years. A premium of $138,765 was included in the bid, which is common when prevailing interest rates are low.
Raymond James had the lowest interest rate of 10 firms to bid on the bonds. The highest interest rate among the bidders was 1.08 percent.
“I will remind you, these are three-year bonds. That’s why they are so low,” said Maggie Burger, senior vice president of Speer Financial, which handled the sale.
The interest will total $55,420, bringing the college’s repayment costs to $6.19 million.
Burger also noted that Moody’s Investors Service assigned one of its highest credit ratings, Aa1, to Hawkeye related to the bond sale. The report cited a sizable service area, including the Cedar Valley, from which the college receives tax revenues; a “solid” financial profile; and a low debt burden and unfunded pension liabilities for the good rating. “This is an excellent report,” she said.
Tuesday’s bond sale is the first since voters in Hawkeye’s 10-county service area authorized issuing $25 million last February. The funds are being repaid over 10 years with property tax levy revenues.
At this point, officials have said the money isn’t tied to any particular project among those outlined in a three-phase master plan prior to the referendum. A site is still being chosen for a new $8 million, 40,000-square-foot Adult Education Center in the first phase, replacing the smaller and aging Metro and Martin Luther King Jr. centers.
A $1.5 million expansion of Hawkeye’s high school career academies, which provide programming to all school districts in its service area, is also part of phase one, with $500,000 coming from bond funds.
The second phase is construction of a $15 million 75,000-square-foot Health Sciences Technology Center on Hawkeye’s main campus, allowing expansion of health care programs and simulation technology under one roof. The third phase is a $2 million renovation of the 67,000-square-foot Grundy Hall, with $1.5 million coming from bond funds, to update and expand space for liberal arts courses, make technology improvements, and provide customized lab and classroom spaces.
In other business, trustees:
- Approved a five-year communications tower agreement with the Mary E. Herzog Living Trust in Buchanan County effective Feb. 1. The agreement, which continues an existing contract, includes a $3,000 annual payment with a 5 percent increase each year. Dan Gillen, Hawkeye’s vice president of administration and finance, said the tower “provides back-up and wireless service to our Independence Center.”
- Heard a report that 5,527 students have enrolled for spring semester, down 1 percent compared to the fall. Students are taking 48,441 credit hours, which is a 2 percent drop from fall.