When Cortez taxpayers went to the polls Nov. 6, a solid majority voted to replace the existing Montezuma-Cortez High School, circa 1967, with a new facility.
When they did, they committed to paying half the building's $43.95 million price tag over 20 years - the rest came from a Building Excellent Schools Today grant.
As it turns out, the mill levy will be smaller than campaign materials had indicated.
Pamphlets delivered to mailboxes and storefronts this fall, and the website for the Cortez 21st Century High School Committee, advertised a bond interest rate of 4.25 percent. For households, this amounted to $1.95 a month (or $23.40 annually) per $100,000 home market value. Commercial properties would pay $7.11 a month ($85.32 annually) per $100,000 market value.
Rates for privately-held agricultural land were set by the acre: 49 cents for sprinkler irrigated, 45 cents for flood irrigated, 2 cents for grazing pastures and 4 cents for dry land.
But after a bond sale facilitated by Denver-based firm RBC Capital Markets in late November, the rate dropped considerably, to 3 percent.
"It's well below modeling estimates from campaign literature, and even further below the ballot question parameters," said RBC director Dan O'Connell. "We are seeing all-time historic low interest rates right now."
The revision means households, per $100,000 market value, will now pay $21.36 a year; for commercial property, $77.40.
The 3 percent rate is now final, locked in for the full 20-year term.
Montezuma-Cortez School District Re-1 Superintendent Alex Carter said the supply of "cheap money" motivated the district's decision to pursue the upgraded facility at this time.
"It wasn't a strong-arm, heavy-handed sales pitch. It was just stating the facts," he said. "The state is giving us half the money. The current school is in disrepair and outdated for learning needs, and it's a great time to borrow."
Pointing out these factors to constituents, he added, was crucial to winning over the "middle third" who were undecided on the tax hike.
"One third of people would support investment in the school system no matter what. Another third would oppose tax increases at all costs. Those in between had to be convinced of the merits of this particular case. The case was so strong that people decided it was time to commit," Carter said.
School bond interest rates can shift from the time a measure is announced and certified - in this case September - until a bond sale occurs. O'Connell said his agency prefers to issue conservative estimates "to make sure we are true to the taxpayers, so they don't get saddled with a higher tax burden than we first told them."
The district knew interest rates were dipping during the campaign, but for clarity's sake decided not to alter the messaging midway through, Carter said.
At the November sale, Re-1's matching money bonds were combined with at least 10 other major infrastructure projects across Colorado, worth some $200 million together. The state aggregates the bonds into one package and uses its credit as leverage to find investors.
lukeg@cortezjournal.com