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Board discusses selling second $100 million bond tranche to fund land purchases and contracts
Summary
Trustees discussed issuing the second $100 million tranche of previously approved bonds in June to fund land purchases and capital contracts; speakers said the district had sold a first tranche last year and is earning interest while the funds await expenditure.
Board members reviewed plans to issue the second tranche of bond proceeds in June to provide capital funds for land purchases and contracts.
A presenter told the board that the district sold the first $100 million tranche last year and that the second $100 million tranche is planned for sale in June. "So if you recall, last year in June, we sold the first hundred million. So this time in June, we're selling the second hundred million, and that's to give the district the funds available to purchase land, enter into contracts, things of that nature," the speaker said.
Trustees discussed how bond proceeds are held and invested while not yet spent. The presenter said the district is earning interest on idle bond proceeds (speaker estimated around 4% in past tranches and noted the upcoming tranche could price higher amid recent rate movement). "The money's working," the presenter said, describing the proceeds as invested until spent.
Board members asked questions about timing and higher near-term interest rates; a presenter said the earlier tranche priced around 4.2%–4.4% and that the upcoming sale could be somewhat higher, in the 4.5%–4.6% range, increasing financing costs but also raising interest-earnings on invested proceeds.
No final contract award or land-purchase agreements were approved during the discussion; trustees indicated the funds are needed so the district will have cash available for imminent capital outlays.
