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Committee told $10M+ in bond interest may trigger IRS arbitrage rules
Summary
Finance staff told the Putnam oversight committee the district has collected just over $10 million in interest on bond proceeds and that arbitrage-rebate rules may limit use of that interest to pay down debt without meeting IRS exceptions.
Putnam County School District bond oversight members were briefed Sept. 17 on bond interest revenue and arbitrage-rebate rules and cautioned that not all interest earned on bond proceeds can automatically be redirected to pay down debt.
"Of the $10,000,000 collected so far, I have talked to a company about the arbitrage rebate," finance staff Jonathan (speaker 14) told the committee, explaining that there are "very few exceptions" that would allow the district to use the…
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