The Kansas City, Kansas, Board of Education on Tuesday night refinanced bonds and raised its local option budget authority to 33 percent.
The action to raise the LOB authority from 30 to 33 percent will not cause the total district mill levy to increase, according to district officials.
While the two actions were independent of each other, they both aligned with the overall objective of improving the district’s financial picture, according to Dennis Covington, chief finance and operating officer.
Refinancing the bonds would save the district about $4 million in interest, according to Covington. The district plans to refinance $82.4 million in general obligation improvement bonds from 2016. The underwriter is Piper, Sandler and Company of Leawood, Kansas, and the bond attorneys are Gilmore and Bell.
Covington said the district has refinanced bonds on about seven different occasions, and about two years ago, it saved the district about $30 million.
Board member Valdenia Winn asked several questions about the refinancing and the increase in the LOB authority.
The district underwent a major building campaign over the past several years, with a bond issue of $235 million. Answering a question from Dr. Winn, Covington said there will also be future opportunities to refinance until they pay off the rest of the bonds.
Refinancing passed on a 4-3 vote with Yolanda Clark, Janey Humphries, Randy Lopez and Dr. Stacy Yeager voting yes, and Maxine Drew, Wanda Brownlee Paige and Dr. Winn voting no.
On increasing the LOB authority from 30 to 33 percent, Covington said the board would have the discretion of how much of that taxing authority it would choose to use. The board will decide at the time it passes the budget how much the LOB rate will be. If the final decision is 33 percent, it could generate an additional $4 million in state aid for operations, according to Covington.
Covington said although the LOB authority was increasing, it would not increase the district’s total mill rate. He said the bond and interest fund would be reduced by 1.16 mills and the supplemental general fund would increase by 1.16 mills.
Dr. Winn asked why wouldn’t taxes increase in 2022-2023, with the LOB going up to 33 percent.
Covington said taxes would not increase because of this action. The overall school district mill rate would stay at 49.650 mills, not changing, he said.
Dr. Winn said that didn’t appear logical to her.
The vote to raise the LOB authority to 33 percent was 5-2, with Yolanda Clark, Maxine Drew, Janey Humphries, Randy Lopez and Dr. Stacy Yeager voting yes.
Dr. Winn and Wanda Brownlee Paige voted no, and Paige said, “because I find this hard to believe.”
The school board has not yet approved a budget for fiscal year 2022.
Several other items also were discussed at the 5.5-hour meeting Tuesday night.
The meeting is online at https://www.youtube.com/watch?v=a3x6wQyeKls.