Financial Transparency
Project Bidding Process
For the bidding process, District 6 uses Rocky Mountain BIDNET to post all Request for Proposals, Request for Qualifications and other bids. This is a common platform used by governmental entities and any vendor can sign up to access the system. BidNet allows vendors to see RFP/Qs by the type of services being requested, so construction projects might be viewed by general contractors, architects, survey companies, engineering companies and smaller firms that might serve as subcontractors, among others. Great care is taken to ensure that all firms are provided an equal opportunity to bid on projects. All questions go through the purchasing department and answers to those questions are posted so that all vendors have the same information. Once proposals are received, they are reviewed by a committee and evaluated based on the merits of the proposal.
For example, here is how the bidding process worked for the rebuilding of Greeley West High School. District 6 released a Request for Qualifications (RFQ) in October 2019 for a Design/Build team for the Greeley West High School replacement project. A Design/Build team consists of a General Contractor and an Architecture Firm who work together to design and build the school. The Design/Build process allows for design work and construction to occur in a cohesive manner, allowing the project to move forward at a faster pace. The initial budget was rovided to the team with the expectation that the design and construction costs fall within that budget. As the final design has not been determined, an exact dollar amount of the contract is still to be determined. That amount will be determined after some initial design work has been done and pricing of materials is complete. This is referred to as a Guaranteed Maximum Price (GMP).
For the Greeley West project, District 6 received 6 proposals from teams. From those proposals, a review committee selected the top three proposals for interviews. Teams that were interviewed were given time to introduce their team members, their process and provide initial thoughts on the project. They then had to answer questions from the committee, and finally they were given a “challenge” exercise they had to present. The purpose of the exercise was two fold--one, we wanted to see what ideas they had come up with for the project, but then when we presented them with a scenario that meant they had to change their initial ideas, we wanted to see how they worked together as a group to overcome the obstacle.
Once a contractor is selected for projects, that contractor is responsible for hiring all subcontractors under a separate bidding process.
Questions on the bidding process should be directed to the Greeley-Evans School District 6 Finance Department at (970) 348-6127.
Bond Sale and Proceeds
Before the election, District 6 began working with a bond advisor, David Bell from Stifel. The information Stifel provided was crucial to a successful election, and helped the District determine how much to ask for in the bond election, and what that amount would ultimately mean for property owners in District 6.
Upon the successful election outcome, the District 6 finance team and the Stifel team began working in earnest to fast track the bond sale.
One of the most important documents in preparing for the bond sale is the offering statement. This is a document used by Stifel to provide potential investors information about the district and the projects the bonds will fund. Many people, including lawyers, accountants and financial professionals reviewed this document through multiple iterations. In addition to the Offering Statement (OS), the district had to go through a credit rating process. The district obtained credit ratings from both Standard & Poors (S&P) and Moody's. The district’s credit rating is strong, and the areas that downgrade the district’s ratings are out of the district’s control. Each credit rating entity has its own rating scale. The district scored at the low end of the “High Grade” ratings with an Aa3 rating from Moody’s and an AA- from S&P.
Once the credit rating and offering statement were complete, Stifel went to work marketing the District 6 bonds. They work with large investors from all over the country to garner interest in the bonds. Stifel strategically worked with other firms to ensure the District 6 bond issue would be on the market on a day with little competition. On Wednesday, January 22, the District 6 bonds were available on the bond market for investors to purchase. The bonds sold in less than two hours.
The sale ended with far more interest in the District 6 bonds than what were available to sell. With the market in an incredibly good place for the bond sale, District 6 was able to generate additional revenue, called a bond premium.
A bond premium occurs when the investor is willing to pay more than the maturity value of the bond in exchange for securing a long-term fixed interest rate. Since a bond premium is not guaranteed and can fluctuate with market conditions, District 6 did not build any bond premium into the budget for its bond projects.
This is all good news! District 6 will be able to use these additional funds to complete more projects and to provide for a healthy contingency fund, and at NO ADDITIONAL COST TO TAXPAYERS. So, essentially our voters are getting more bang for their buck!
The amount of bonds District 6 sold was $250 million. The sale generated a premium of about $64 million. After the costs to issue the bonds are taken out, District 6 has a little more than $63 million in additional revenue.
The Bond Oversight Committee will be consulted on what to do with these premium dollars, and make recommendations to the Board of Education. Ultimately, some of the money will be kept in a contingency fund to cover any additional expenses that arise from the projects planned in this bond issue. And, there will probably be enough money to complete additional projects.