A school district in Portland, Oregon sold more than $140 million worth of bonds to fund capital improvement costs across the district, including several health and safety measures.
The general obligation bonds issued by the David Douglas School District in Multnomah County include almost $94 million in series 2023A bonds and $46 million in series 2023B bonds. The bonds will mature between 2025 and 2051.
The bonds yield between 3.65% and 5.3%. S&P Global Ratings gave the bonds a rating of AA-.
“The proceeds from the sale of the Bonds will be used to finance capital costs and to pay the costs of issuance of the Bonds,” according to the official statement accompanying the sale of the bonds.
School districts across the U.S. saw major declines in enrollment during the COVID-19 pandemic. The bond sale could signal a recovery from pandemic-era budget cuts.
In 2022, the district ran a deficit of $54.1 million amid an ongoing recovery from the pandemic, which disrupted the county’s economy. That deficit marked an improvement from the previous year, when the district ran a deficit of $74.7 million. The district last issued bonds in 2012.
Among other projects, the bonds will finance the construction of secure entries at the district’s elementary schools, the removal of asbestos ceilings, the replacement of old fire safety systems, improvements to electrical, flooring, lighting and plumbing, and a new STEM learning center at the district’s high school.
Oregon school districts receive funding from two primary sources: state aid and property taxes. Total real market value in Multnomah County, a measure by which the county assesses property taxes, has increased by 37.5 percent since 2018. The most recent Oregon governor’s budget includes $9.9 billion in appropriations to be divided over the next two years, an increase over the $9.2 billion allocated in 2022 and 2023. David Douglas County received about $90 million from the state in 2023.
The district was formed in 1959 as a consolidation of the three elementary school districts and one high school district. It has since grown to include 14 schools with a total enrollment of nearly 9,000. Multnomah County includes Eastern Portland and has a population of 810,242, according to the Center for Population Research and Census at Portland State University.
Neither the district nor the county has ever defaulted on its bonds.
The investment bank Piper Sandler served as underwriter for the bond issuance.