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Haysville district sells $77.6 million in bonds, board authorizes contingency investment account
Summary
The USD 261 school board approved issuance of $77.61 million in general-obligation bonds after a strong marketing showing and an S&P rating upgrade; the board also authorized a contingency municipal investment account to hold proceeds at closing if primary depositories are not ready.
The Haysville Board of Education voted 4-0 to authorize issuance of general-obligation refunding and school-building bonds totaling $77,610,000 and to approve a contingency plan to deposit bond proceeds in a municipal investment program if needed at closing.
The vote followed a presentation from Steve Sjogren, managing director with Stifel, who said the district’s switch to S&P Global for a credit opinion resulted in an upgraded underlying rating. "We got an uptick from an A rating to an A plus," Sjogren said, and strong investor demand let the district sell the bonds at lower yields than expected.
Board members were told Stifel premarketed the bonds and that orders exceeded supply by roughly 2.5 times. Sjogren said, "By the end of the order period, we had orders for 185,000,000," and the firm adjusted yields downward during the order period to firm pricing. He described the sale as efficient enough that Stifel designated the transaction “deal of the week.”
Why it matters: the sale generates roughly $4.17 million in immediate proceeds plus expected investment earnings on the construction draw schedule. Stifel projected reinvestment earnings of about 3.8 percent on proceeds over the anticipated draw period, which the firm estimated would add roughly $6.25 million to project resources. Sjogren said those reinvestment estimates could change before settlement but presented them as the working projection.
Key details: the district marketed bonds totaling the voter-authorized maximum of about $79.7 million but issued only $77.61 million to keep the projected mill levy at or below the previously stated cap of 13.714 mills. Bond counsel Gilmore & Bell prepared the authorizing resolution; the bonds carry bond insurance from Assured Guaranty Municipal. Stifel reported an average true interest cost of about 4.442 percent for the sale.
Contingency deposit plan: because state law requires the district to invest bond proceeds and because some local banks may need time to open accounts or pledge collateral for large deposits, the board also approved a resolution authorizing district officials to open an account with a Municipal Investment Program (MIP) as a temporary repository. Sjogren described the MIP as "a legal investment provider for municipal bond proceeds" and said the MIP would be used only as a backup if primary providers were not ready on closing day. "It's a backup, I don't think we'll need it, but there's no cost," he said.
Board action: Motion to approve the bond resolution carried 4-0. A separate motion to authorize participation in the municipal investment program (MIP) also passed 4-0. Superintendent and finance staff said they will return to the board with final investment choices and details about how proceeds will be placed and reinvested once settlement approaches.
Next steps: Stifel plans to settle the bond sale around July 1 and deliver proceeds to the district; the administration will present recommended short-term investment options to the board before funds are moved from any temporary account.
