Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Bonds Debt Finance topic
No spam. Unsubscribe anytime.
Board approves resolution to issue up to $38 million in G.O. bonds to begin referendum work
Summary
After a presentation from PMA municipal adviser, the Kaneland Board authorized a parameters resolution to sell up to $38 million in general obligation bonds to fund referendum projects and refund prior obligations; the vote was 6-0.
The Kaneland Board of Education approved a parameters resolution authorizing the issuance of up to $38,000,000 in general obligation school bonds to fund voter-approved referendum projects and to refund outstanding obligations.
Bob Lewis of PMA, the district's municipal adviser, briefed the board on next steps following the April 1 referendum certification and the statutory petition period. Lewis explained that the parameters resolution establishes maximums (amount, term and a maximum coupon) and delegates authority to two administrative officials (the superintendent and assistant superintendent for business) and two elected officials (board president and vice president) to approve final sale details within those parameters.
Lewis described tax-exempt bond requirements under the federal tax code, including the 'expenditure test' (a reasonable expectation to spend 85% of proceeds within three years) and other timing and due-diligence tests. He reviewed a projected draw schedule showing phased bond series that PMA and the district expect will meet tax-exempt tests and allow the district to limit restructuring of existing debt. Lewis also explained arbitrage concepts and exceptions that can affect rebate obligations to the IRS.
PMA recommended a phased sale structure: roughly $25,000,000 of new money in the first series with additional tranches later; the total $38,000,000 parameter includes an estimated $8,000,000 to refund existing debt plus a conservative buffer. Lewis said the board's resolution caps coupon rates at 5.5 percent. He outlined a tentative timeline: board approval of parameters at the May meeting, a possible bond sale on June 16, and bond closing and funding around July 8, subject to market conditions.
The resolution passed on a roll call vote, 6'0'00. The board president moved the motion and it was seconded; the recorded yes votes were from Board Members Cook, McCauley, Stalcup, Mankiewicz, Kliesner and Simmons. Lewis and district staff said proceeds will be invested and drawn down according to the project schedule so tax-exempt conditions are met before construction spending accelerates.
