Financial adviser outlines bond options as district nears payoff of existing debt

Dustin Hayden, a municipal finance professional with Piper Sandler, told the Mission Public Schools Board of Education that the district approaches a window to issue new bonds as existing bonds near payoff and offered a high-level ‘‘plan of finance’’ to show options, timing and tax impacts.

Hayden said the district’s existing bond-interest payment is about $935,000 to $940,000 per year and that the board currently sets a bond mill levy of 6.3 mills. He said the district receives some motor-vehicle revenue for the bond-interest fund but that roughly $900,000 of the annual payment is borne by local property taxpayers. ‘‘One mil in the district generates about $150,000 of revenue,’’ Hayden said.

The presentation’s purpose, Hayden told the board, was not to propose a specific project but to show the financial capacity the district could realize and the mill-levy effects of different issue sizes and terms. Using conservative assumption scenarios, he said the district’s long-term valuation growth had averaged about 5% over 10 years and a little under 4% over three years, but his working model used a 1% valuation-growth assumption for the bond-interest fund analysis.

Hayden showed hypothetical financing scenarios using sample issue dates in 2026. Under one example, the district could finance about $12.5 million over 20 years without increasing the current mill levy; in other scenarios, a $15 million, $20 million or $30 million issue produced steadily higher mill-levy requirements. He gave an example that a $30 million, 20-year issue could add roughly eight mills to the levy and that the cash-flow impact for a homeowner varies by home value (he calculated about $183 per year for a $200,000 home under that 20-year $30 million scenario). He also contrasted 20‑year versus 25‑year terms: a longer term lowers annual payments (and annual mills) but increases total interest paid over the life of the bonds.

Hayden cautioned the board that interest-rate movement is uncertain and said his sense was ‘‘there’s more upward pressure than downward’’ relative to current levels; he noted that current rates were comparable to pre‑COVID levels. He listed key variables for any plan of finance: interest rates, valuation trends, and what projects the district chooses to fund. He also reminded the board that under Kansas law school district bonds cannot exceed 30 years, and that practical terms for school capital typically are 20 or 25 years.

On timing, Hayden said the ‘‘earliest’’ practical election to preserve a flatter mill-levy profile would be November 2025 for a 2026 issuance, with the latest practical point stretching into spring 2027. He emphasized the value of community outreach and said districts sometimes treat an election like a final survey: ‘‘you don’t know until you ask voters to decide whether they would be supportive of that project.’’

Board members asked about stacking new debt with existing bonds that still have low interest rates. Hayden recommended not consolidating the low-rate serial bonds with a new issue unless it made financial sense; instead, he said, the district could issue a separate series for new projects and ‘‘wrap’’ new payments around the existing schedule.

Why it matters: the district’s bond strategy will affect local property taxes and how much capital work—maintenance, roof and HVAC projects, new construction—the board can fund without sharply raising the mill levy or asking voters to accept a higher tax rate. Hayden’s numbers supplied a framework for the board’s upcoming facilities planning and any decision to call an election.

What’s next: Hayden said his office will refine these figures when the board picks specific projects and as market conditions firm up; he recommended giving the district flexibility to test community support before finalizing an election date or bond amount.