Members of the Emporia Public Schools Board of Education unanimously adopted a resolution authorizing the sale of general obligation bonds during a specially-called meeting Monday evening.
USD 253 is scheduling the $78 million bond to be paid over the next 28 years, addressing major areas of need in all area public schools such as safety and security; additions and renovations to academic spaces; a new early childhood learning facility; up-to-date building systems; and projects to improve parking and traffic flow.
“When voters approve a bond issue, it basically authorizes the district to borrow money to support its construction fund,” Piper Jaffray Managing Director Dustin Avey said. “All $78 million will be deposited with the district’s account on closing day, which is Dec. 18. At that point, they will use those funds to pay for construction costs over the next two and a half years.
“We put together documents that are distributed to investors across the country. Those investors may be mutual fund companies, banks, trust departments, money managers and individuals … We market the bond to investors, they submit their orders, and then we obviously go through this process to secure final rates by doing that. When we sell the bonds, the rates and the terms are locked in at the time they’re sold.”
Thanks to changes in valuation estimates and interest rates, Avey said the district would end up saving millions of dollars compared to what was forecasted when it originally called for the bond election.
“From May to where we are today, it’s about $16 million less of interest that’s accrued by the school district over the financing term,” Avey said.
The rate changes also proved to make a savings for local taxpayers, helping significantly reduce the required mill levy increase. The previous projected increase of 2.95 mills would have equated to a $2.83 per month — $33.96 per year — property tax increase for a $100,000 home within the district. The new, smaller increase of .5 mills — which can also be attributed in part to the addition of funds in the overall tax roll from the expiration of tax incentives at the Hill’s Pet Nutrition plant — comes to a payment of 48 cents per month. The bond now adds only $5.76 per year for the same $100,000 home in addition to what the resident is currently paying.
“It’s remarkable,” Avey said. “The district has been going through this process for a long time when you think about all the number reiterations and the different options we’ve reviewed with the board … To also come in below those original estimates is huge from the district’s perspective in terms of meeting its overall commitments and being able to undertake a very large infrastructure improvement project with minimal impact to the mill levy.”
Additional information on the bond can be found online at go.boarddocs.com/ks/usd253/Board.nsf/Public under the Nov. 25 meeting.