• FREQUENTLY ASKED QUESTIONS

    Why are we asking for so much now?

    • Providing housing for staff has been an issue for quite some time.  The school has lost some educators because they could not find a place to live and took jobs at other schools that provide that benefit.  A resident who has a deep concern for the Hobson community and wants to see Hobson School continue to attract quality staff and residents has provided the school with the opportunity to purchase a duplex they own.  They are offering this property at a good deal as they could have sold it many times over and for more money than they are asking the school.  They want the school to be able to help attract and retain teachers in the community.  The board looked at building a duplex somewhere on the currently owned property but realized that the cost would be more than they thought taxpayers would be willing to support.  The duplex seemed the best option.
    • When anyone owns a property, there eventually needs to be updates and replacements to that property. Lately, there are a lot of funds being spent each year on trying to fix the infrastructure problems, so trying to save to attain enough money for the projects has not been possible.  The school has been diligent in keeping the tax burden down as much as possible, but the time has come for this aging building to begin these updates and repairs. 
    • Laws have also changed since the school was built and safety requirements for schools are to be implemented. These requirements affect the kitchen, science room, and egress windows in the classrooms. The Board went through the buildings and made a list of things that should be addressed. 

     

    Why did you cut so much from the original projects?  Why not get everything that should be done all at once?

    • When the board went through the school and compiled a "wish list," the total came back at over 6.5 million dollars.  It is always a fear of "what will we do if it does not pass."  This number seemed daunting at the time, so the committee came back together and took some things out that can hopefully be done a little each year with the building reserve fund or that we can try to manage as is, such as a bus parking pad, sound system, security cameras, lighting, and building a teacherage.  The district is always doing its best to do its due diligence to keep costs down for the taxpayers and yet maintain our facility. The committee felt it is better to try to get this bond down but still try to address the major issues facing an aging building and get things up to code for the requirements of safety. With these cutbacks, we hope that the constituents will see that the board is doing its best to address the issues of the building and yet keep the tax burden down with the hope that the bond will be more appealing and that it will pass so we can begin the process of getting these goals met.

    How will the sale of the Hobson School Bonds work?

    • Once the Hobson School Bond issue passes, the Hobson School Board will adopt an Authorizing Bond Resolution to move ahead with the financing process of issuing tax-exempt municipal bonds. 
    • Montana school bonds are usually sold between 75 to 90 days after the bond election.  Hobson School District will plan to lock rates on the day the Bonds are sold through D.A. Davidson’s Montana offices to individual investors, banks, and other institutional investors.  With a Hobson School Bond issue in a total principal amount of $4,600,000, there will be 920 individual Bonds in $5,000 increments available for purchase. 
    • Local investors will be informed on the details of purchasing the Hobson School Bonds through public notices that will include the date the Bonds are available and information regarding the rates and other terms of the Bonds.  The rates and other terms will be set based on bond market conditions at the time of issuance of the Bonds.  If you are interested in hearing more about the Hobson School Bond purchase opportunity, please contact Staci Auck and she will put your name on a contact list for information updates.

     

    What is the benefit of buying a Hobson General Obligation Tax-Exempt Bond?

    • Montana tax-exempt municipal bonds are favorable tax-advantaged investments that are exempt from both State and Federal income for Montana residents.
    • Montana general obligation school bonds are considered very safe investments and typically carry an “A” or better credit rating.
    • A Montana individual investor who purchases one of the District’s tax-exempt Bonds in a $5,000 increment, will have the benefit of the interest on the Bonds being exempt from both State and Federal income tax.  For instance, a purchaser in the top tax income bracket would need to realize a rate of 7.13% on a Bank CD to get the same after-tax return as a 4.00% tax-exempt Bond.
    • Interest payments to bondholders would be made twice a year on January 1 and July 1 until the final maturity date of the Bond. With a 20-year term of the Bonds, there will be 20 different maturities in the years 2025-2044 for consideration.

     

    What is the security behind a Hobson General Obligation School Bond?

    • The Hobson School Bonds are unlimited tax general obligations of the school district, which means the Bonds are backed by property taxes levied by the District against all taxable property in the District over the 20-year term of the Bonds in an amount necessary to make the annual debt service payments.
    • Hobson School District expects to apply for a credit rating assigned by either the S&P or Moody’s credit rating agencies.  Based on other similar Montana general obligation school Bonds, the credit rating is expected to be ‘investment grade’ in the “A” category.