MULVANE – The Board of Education approved a $20.8 million bond issue to finance $13.4 million in improvements and to refinance 2004 bonds at a lower rate.
Voters authorized the $13.4 million for school improvements in a May bond election.
Work has already started on the projects, which include a $3.9 million stadium renovation, and safety and security enhancements and additional space in the primary school, grade school and transportation/operations building.
A 1 percent difference between the estimated and actual rates on the bonds will lower total interest cost by approximately $1.42 million, said Steve Shogren, senior vice president of George K. Baum and Company, the placement agent for the bond sale.
“We are pleased to assist Mulvane Schools in this cost-effective financing transaction,” he said. “With interest rates very near 50-year low levels, now was an opportune time to market the bonds to lock in interest cost savings for USD 263 and its taxpayers.”
The Series 2012 Bonds were purchased in a private placement transaction by Banc of America Capital Markets at a rate of 2.5 percent.
The original estimate for the financing, prior to the May election, had assumed an interest rate of 3.5 percent.
In pre-election calculations, the bond issue was estimated to increase local property taxes by 1.58 mills. According to Shogren, the sale result will lower the net increase to approximately 9/10ths of 1 mill.
The new Series 2012 Bonds will now be printed, and a transcript submitted to the Attorney General’s office for approval, said Tom Keil, Mulvane Public Schools director of human resources/ communications.
The transaction is scheduled to close on Aug. 1.
The District received an “A+” rating (with stable outlook) from Standard & Poor’s Corporation on the bonds.
Bond proceeds will be invested with the assistance of Carson Bank until monies are needed to pay project costs.
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