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Finance staff reports $587,725 IRS arbitrage rebate while keeping about $1.9M; 2015 bond refunding saved roughly $1.05M
Summary
At a Feb. 8 Dorchester 02 finance committee meeting, staff said the district must pay a $587,725 arbitrage rebate to the IRS because investment returns exceeded allowable yields, though it retained about $1.9 million of earnings; staff also reported a 2025 refunding of 2015 bonds produced about $1.054 million in gross savings.
The Dorchester 02 finance committee was told Feb. 8 that investment returns on bond proceeds exceeded the allowable tax-exempt yield, triggering an arbitrage rebate payment to the Internal Revenue Service while leaving the district with substantial retained earnings.
A staff member explained that the district had received a $57,000,000 bond anticipation note for referendum projects and held other tax-exempt issuance; over the reporting period the district’s investment income totaled $2,519,092. "So our investment income... was $2,519,092," the staff member said, adding that the district’s bond…
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