Courier Staff Writer

CEDAR FALLS -- A tumultuous economy is not expected to have a noticeable impact on the upcoming sale of $10 million in bonds in the Cedar Falls Community School District.

Larry Burger of Speer Financial said the economy has decreased the number of buyers in the bond market but added that there are still plenty who will be interested in investing in a community like Cedar Falls.

"What else is safer than a municipal bond or a school bond right now, especially when compared to your 401(k)?" he asked.

The district is set to sell $10 million in bond anticipation notes today via an Internet sale. That money, which will be repaid using mostly local option sales tax dollars, will be used to kick off the construction and remodeling project at Holmes Junior High School.

The sale is expected to be approved at a special meeting today at 5:15 p.m. at the administration building. Burger expects the district to see interest rates between 3.9 and 4.3 percent. The district is awaiting its Standard and Poor rating.

"It's kind of a wild market out there, and it is keeping everyone on their toes, but we are selling bonds," Burger assured the board.

The Holmes project, which is expected to begin next month, includes new construction pieces that would house a gym with a platform stage, a wrestling room, weight room and music practice space. A new library and administration offices are also planned. Existing classrooms will then undergo extensive upgrades for a new geothermal system and technology components. Several moveable walls will also be replaced with permanent structures.

A similar project at Peet Junior High is expected to begin in 2009.

Burger said the district can weigh its options again in 18 months to two years to determine if the market is more conducive to short- or long-term bond options.

In July, the board talked about selling a $17.5 million revenue bond in two years. The dollar value of the bond could change if sales tax receipts increase or the state allows districts to bond for more of their expected revenue.

If the district does opt for the revenue bonds, the money would be used to set up a reserve fund, pay issuance costs and refund the short-term bonds the board is expected to purchase.

About $1.25 million in physical plant and equipment levy money also has been earmarked for the projects.

Doug Nefzger, the district's director of business affairs, said the PPEL money could be used for parking lots, windows or gym floors.

Contact Emily Christensen at 291-1570 or emily.christensen@wcfcourier.com.