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Paducah to remit $946,515.49 to Treasury after bond proceeds earned above allowed yield
Summary
City finance staff and outside consultants told the commission that earnings on 2020 bond proceeds exceeded the allowable arbitrage yield; the commission authorized a $946,515.49 payment to the U.S. Treasury to resolve the liability.
The Paducah Board of Commissioners on March 4 authorized the finance director to remit $946,515.49 to the U.S. Department of the Treasury after consultants calculated a yield‑restriction (arbitrage) liability tied to a 2020 general obligation bond issue.
City staff explained the background: in January 2020 the city issued a general obligation bond (GLB 2020A) that produced roughly $20 million in proceeds originally intended to finance an aquatic facility. Subsequent decisions redirected some proceeds to other capital projects. Federal rules for tax‑exempt bonds allow an issuer a limited period to spend proceeds; funds…
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