Sinking interest rates have prompted Crowder College to refinance its 2006 bond.

Sinking interest rates have prompted Crowder College to refinance its 2006 bond.

Board members voted Tuesday to approve recalling the 2006 bonds issued for construction of the Arnold Farber building and refinance them. The board also approved an addition of $3 million to the existing bond. Those funds will hold a general designation, but are destined for upcoming capital projects, said vice president of finance Ron Granger.

The school is currently raising private funds for a LEED-certified McDonald County campus with early estimates setting the cost at $6 million. The $3 million addition to this bond could be used to supplement that project. Granger said he hopes to have bonds issued by the first of the year.

“We hope to start building in the spring,” Granger said of the McDonald County facility. “This bond timing would be perfect for that or renovating Newton and McDonald Hall.”

If funds are not needed for the McDonald County project, the college’s two original buildings, Newton and
see crowder, page 10McDonald halls, are in need of renovation. Making those buildings more energy-efficient would save the college in utility costs.

This would be the school’s first construction bond since 1996, Granger pointed out. Davidson Hall, finished last year, and the current construction at the Missouri Alternative and Renewable Energy Technology Center building, were both financed without the use of bonds. The Davidson project received private donations, but Federal Emergency Management Agency funds paid for the tornado shelter shell. Another $3 million was budgeted for its construction from the school’s general fund. The MARET Center is being largely financed by a series of Department of Energy grants.

Refinancing now, he told the board, makes sense because interest rates have dropped since the school issued approximately $5.7 million to help pay for the $7.3 million Farber building in 2006. Five years later they have the option to recall and reissue those bonds.

“If we just rolled over what we’ve got we’d save $160,000 to $170,000 over the 15 years,” Granger said.

Total interest for the entire bonding project would have been $2.3 million if they took no action, Granger told board members, but because rates are so low adding $3 million to the bond would give them a total of $2.5 million in interest or a $200,000 increase. Bond rates, currently at 4 percent and rising to 4.65 percent when the bond ends in February 2026, would drop to 1 percent this year then slowly rise to peak at 4.15 percent in 2026.

“I don’t know when we’ll get it any better than this,” Granger said.

“I agree,” said board member Rick Butler, “I’ve been saying for the past four years ‘I can’t see it getting any lower’ and it keeps getting lower.”

The bonds were originally issued for 20 years, but Crowder would keep them on a 15-year timeframe.

Enrollment numbers held steady again this year with Crowder seeing a slight boost across its eight locations.

“We have entered a year where we have a little more modest growth,” said Jim Riggs, director of admissions. “If we look back – and we don’t have to look back very far – back to 2001, our growth here has been 169 percent in the past 10 years.”

Across the board student enrollment rose 3.66 percent. Neosho rose from 3,486 students last year to 3,560 this year; Cassville from 458 to 478; Nevada stayed steady with 472 last year and 471 this year; Webb City moved from 758 students to 780; McDonald County went from 45 to 54; and 67 new students filled classrooms in Monett, Lamar and Greenfield. Those new locations are where the school will be seeing much of its future growth, Riggs predicted.

“We’re pretty much maxed out in our classrooms,” Riggs said.

The school added two locations in Monett with 42 students, one in Lamar housing a CNA program of 13 and general education classes in the Greenfield high school with another 12 students. The school is in negotiations with Mount Vernon to house five classrooms and two offices for the spring semester.

“I think we’ll start out with a very good slate of general education classes there,” said Dr. Herb Schade, interim vice president of academic affairs.

Board members asked about the faculty overload as classes are added to meet demand. That has lessened some with the addition of a dozen new faculty members, Schade said, but it still exists.

“I think we’re ready for some modest growth here,” said board president Andy Wood.

Crowder President Dr. Alan Marble noted, still had record growth and will likely exceed growth at other schools for the year.

“We’re going to be, probably, on the upper end,” Marble said of the numbers.