Hermiston School District administrators are keeping an eye on the bond market as they prepare to start bond sales in March or April for the district’s new school projects.

Part of the watch will be trying to raise the district’s bond rating, which is AA-, after being advised to do so by Seattle Northwest Securities, which specializes in tax-exempt bond sales.

“If we improve our rating, it will lower our interest rate and help with the burden on taxpayers,” said Assistant Superintendent Wade Smith.

He said the district’s current rating is good, but Seattle Northwest has advised administrators it’s worth the effort to improve it.

“We’re looking to give a presentation in March to Standard & Poor’s to try and change our rating,” he said.

To do so, the district will bring its Comprehensive Financial Report to the presentation to make its case.

But even with that report, it doesn’t mean the rating will be changed with three options for Standard & Poor’s to choose from.

“They can either raise our rating, lower it or say we aren’t warranted for an improvement,” Smith said.

Smith doesn’t see Standard and Poor’s lowering the school’s rating though, and even if S&P didn’t improve it, that would not harm the schools plans.

The district, Smith said, is considering two separate bond sales to help with interest payments.

Smith added, the first $25 million will be used for the mobilization of the projects including the asbestos abatement and demolition of the old hospital. The remaining $44.5 million would go for construction costs. The three new schools, Sunset Elementary, West Park Elementary and Armand Larive Middle School, are to be completed by 2012.

“Two sales makes the most sense with the cash flow, and types of bonds,” Smith said.

The types of bonds the district uses, municipal, are in good standing currently in the market, said District Business Manager Jim Thompson.

“Investors are coming back and looking at secure bonds, making it a good time for school districts,” Thompson said.

School districts are backed by property taxes, making municipal bonds less risky for investors.

Thompson said the district will know more when it looks at the market more closely in March or April to see how other school bonds are doing.

“When we look at the markets, we have to look at what school district bonds are selling for on similar issues,” he said.