DALLAS — Kansas will finance the fifth phase of a multi-year reconstruction project at the state capitol in Topeka with proceeds from tomorrow’s competitive offering of $43.6 million of bonds by the Kansas Development Finance Authority.
The sale will include $3.7 million of tax-exempt revenue bonds and $39.7 million of taxable Build America Bonds.
The bonds are rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service.
Columbia Capital Management LLC serves as financial adviser to the KDFA. Gilmore & Bell PC is the authority’s bond counsel.
James MacMurray, vice president of finance at KDFA, said the state is issuing BABs rather than conventional tax-exempt debt for the statehouse renovation work as a cost-saving move.
“We’re estimating that the BABs will save about $500,000 in debt service costs,” McMurray said. “Markets can change and the savings would be more or less depending on conditions, but hopefully it won’t change much from the savings we’re projecting.”
The Series 2010-O bonds are the 10th tranche to be issued for the statehouse project under a legislative authorization of approximately $285 million.
Kansas has issued some $217 million of debt, not counting the current issue, to provide $212 million for the renovation effort.
MacMurray said the 11th and final bond issue for the project is expected in 2011.
“We will be issuing an additional bond issue in the next calendar year to provide $38 million for the statehouse project,” he said. “We expect that will be the last one.”
Lawmakers authorized the current bonds and the anticipated 2011 debt for statehouse work earlier this year.
The renovation project was approved by the Legislature in 2000. Work began in 2001.
The cost of the effort was initially estimated at $90 million to $120 million, but the project was expanded in later legislative sessions to include an underground parking garage, expanded office space for lawmakers, and a visitors center.
Four of the five statehouse renovation phases have been completed or are in the process of completion.
Thursday’s sale will provide approximately $39 million to complete renovation of the building’s north wing and rotunda.
Proceeds also will provide $3 million for updates to National Guard armories in Manhattan, Topeka, Wichita, and Hays.