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School board authorizes offering of Series 2026 general-obligation bonds
Summary
The McPherson USD 418 board authorized offering voter-approved general-obligation bonds (Series 2026), with staff outlining a tentative sale window in early May, an estimated true interest cost near 4.85% and plans to use sale premiums only for ballot-specified projects or debt service.
The McPherson USD 418 Board of Education on April 13 authorized the district to offer for sale a Series 2026 general-obligation bond package that voters approved to fund school construction and related projects. The authorization begins a multi-step process that staff said could bring a marketing window in early May and a targeted closing in late May.
During a detailed briefing, finance presenter Dustin Ay explained the district will sell the $89.5 million par amount approved by voters and that investor demand may generate a premium. "Those are district funds and can be used for one of two purposes: projects outlined by the ballot question or principal and interest payments," Ay said, adding that statutory fund restrictions prevent transferring project funds into bond repayment accounts.
Ay told the board the transaction’s true interest cost based on current market conditions was roughly 4.85 percent and that, depending on market timing, proceeds could provide additional investment earnings while construction draw schedules are executed. He outlined a plan to pay off selected prior leases early as part of the transaction and estimated interest savings from earlier bond retirements and lease payoffs.
Board members asked how the trustee would control requisitions and vendor payments; Ay said Security Bank of Kansas City would serve as fiscal agent and trustee and would release funds to vendors only after district requisitions were approved. Ay also detailed the credit-rating steps and said the district has distributed a rating packet and scheduled a call with rating analysts.
Following questions, a board member moved to adopt the resolution authorizing the offering for sale; the motion was seconded and adopted. According to staff, final bond terms will return to the board for approval at a later meeting once market conditions and investor pricing are known.
The next formal steps staff outlined include marketing the bonds (staff gave an early May window), returning to the board with final terms and targeting a late-May closing. Staff said all proceeds must be used in accordance with the ballot language and related statutory constraints and that funds will be held by the trustee until requisitions and construction draw schedules are in place.
