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Board approves resolution after district locks 4.8% rate on 30-year bonds
Summary
The McPherson Unified School District board approved a resolution authorizing the issuance of 2026 general obligation bonds after financial advisors reported strong investor demand and a locked 30-year interest rate of 4.8%; staff said the sale should close May 28 and estimated roughly $3 million in investment earnings over the project life.
Clayton, a presenter for the district's finance team, told the board the district secured strong investor demand and locked a 4.8% interest rate on the district's 30-year bond financing. He said the sales process produced sufficient bids to allow the district to secure what he called an "aggressive" final rate and that closing is expected on May 28.
The presentation also included an estimate of investment earnings tied to the construction draw schedule; staff estimated about $3 million in investment earnings over the life of the project, with final numbers to be confirmed once the district finalizes the draw schedule with the construction team.
Board members moved to approve a resolution "authorizing and directing the issuance, sale, and delivery of general obligation bonds 2026 of Unified School District No. 418, McPherson County, Kansas," to provide for levy and collection of annual tax for debt service and to authorize related documents. The motion was seconded and the board voted in favor.
Why it matters: locking a long-term interest rate is a key step that fixes the district's borrowing cost for the proposed project scope and allows staff to finalize budget schedules for upcoming fiscal years. The reported investment earnings will offset some project costs or debt service, but staff said the final amounts will be clarified once construction draw timing is set.
What happens next: staff will finalize closing paperwork and complete the bond closing on the date presented. The board is scheduled to receive additional budget updates as debt-service schedules are integrated into the district budget process.
Quote: "We were able to get the aggressive in that final interest rate and lock in a 4.8% on that 30-year financing," Clayton told the board during his update.
Provenance: Presented to the board during the new-business bond financing item (topic intro: SEG 495; topic finish: SEG 619).
