Members of the Topeka Unified School District 501 board of education had an abbreviated meeting on Thursday, voting on only one action item pertaining to the refinancing of a portion of the $143 million in bonds approved by patrons in 2014.
Board members approved a recommendation from Gary Menke, USD 501’s director of fiscal services, to allow Greg Vahrenberg of Piper Jaffray, the district’s bond adviser, to research the bond market to determine whether it would be favorable to refinance an estimated $9.5 million in 2014 bonds after Jan. 1.
Menke told board members that interest rates that would be paid as part of the refinancing are “at historic lows.”
“We want to move forward because the market tells us it’s advantageous to do that,” he said, adding that if the $9.5 million is refinanced, a potential savings of $403,000 could be realized.
Menke said, however, if the Republican-backed tax bill gets passed by Congress, that would be detrimental to school districts trying to refinance their bonds because it would “trade income tax cuts for local property tax increases” because a large portion of the taxes that school districts and local government entities levy come from property taxes.
“If a tax bill is passed in 2018, it could erase our work on this,” he said. “It’s certainly not good for public entities. It wouldn’t allow for the refinancing of this kind of debt.”
Board members approved the refinancing of $9.04 million of 2014 bonds that were part of the $143 million bond election during their Nov. 2 meeting for an estimated saving of more than $530,000.
Vahrenburg said then that the savings to USD 501’s bond and interest fund doesn’t impact the operational funds for the district. He said a total of $6,790,885 has been saved from the 2004, 2005, 2007 and 2017 bond refinancing.
Contact reporter Angela Deines at (785) 295-1143 or @AngelaDeines on Twitter.