No increase in the tax rate
How can we have a bond issue without an increase in the tax rate (mill levy)?
The Board of Education is able to structure the bonds without an increase in the bond and interest tax rate for these primary reasons.
Paying down our debt. By the time new bonds would be issued, we will have reduced our debt by $78,280,000 since 2010. Sound fiscal planning is positioning the school district to move forward in accomplishing its vision and mission. Because our estimates for paying back the bonds over 20 years are conservative, the tax rate will not only stay below the current rate, we believe it will continue to decrease. Plus, we’re retiring debt faster than any new bonds would be added.
Strong financial rating. On February 24, 2017, USD 232 received an upgraded credit rating from Moody’s Investors Service from a rating of Aa3 to Aa2. This was accomplished while the State of Kansas credit rating was downgraded. The sound fiscal management and financial health of the school district, along with our upgraded credit rating, will enable us to take advantage of lower interest rates. Buyers will see our bonds as a solid investment.
Refunding of existing bonds will save on interest expenses. We believe there will be opportunity in the coming months for the Board of Education to refund some existing bonds for interest savings. The projected interest savings would be approximately $2.9 million. Refunding bonds does not extend the terms. We will pay off the bonds on schedule.
Phased approach. The bond issue, if approved by voters, would be sold in three phases over three consecutive years. This allows the Board of Education to strategically and appropriately manage the bond and interest tax rate, selling the bonds as needed to complete projects and address needs.
We prepared a chart showing conservative estimates on how the tax rate for the bond issue, if approved by voters, will not increase from today’s current tax rate and continue to decrease.