Interest high in buying school bonds
The school bonds sold fast.
Last week, the $25.3 million worth of bonds for Tonganoxie's school construction went on sale. And within hours, the bonds had been spoken for.
The bonds will cover the cost of constructing a fifth-through eighth-grade middle school on the district's 80 acres; renovating the existing grade school into a kindergarten through fourth-grade facility; and revamping the junior high and high school into a four-year high school.
On March 1, Roger Edgar, bond consultant with George K. Baum and Co., relayed the news at a special school board meeting, during which members accepted the sale of the bonds.
"As a general rule, there's always a good strong market for municipal bonds for a government entity like USD 464," Edgar told the board members. "We feel that the timing is right to sell the bonds."
Edgar explained that in the past several weeks, short-term rates had increased, and long-term rates had not.
"But we felt like it was inevitable at some point," Edgar said. "We benefit from the long-term rates being low, but the fact that short-term interest rates have come up has also helped us in the fact that we can turn around and re-invest the money."
By money, Edgar was referring to unspent bond proceeds.
Edgar said the interest paid on the 25-year bonds would be about 4.66 percent, less than the 5.1 percent earlier projected.
That means the tax increase could be slightly less than the 10.91-mill hike earlier projected, Edgar said. Property owners will see the tax increase on their November property tax statements, Edgar said.
At the same meeting, board members also voted to accept a bid from First State Bank and Trust to act as the depository for unspent bond funds. First State Bank bid 3.11 percent.