Bond Refinancing Yields $1.5M Savings

Thanks to a lucrative bond refinancing, will realize $1.5 million in savings over the next 17 years.

Business administrator Lynn Shugars said state law requires school districts to pursue bond refinancing if a savings of 3 percent or more can be realized. The district had been keeping its eye on interest rates for some time and jumped when they dropped to the right amount.

Last week, the district accepted bids to refinance its outstanding 2003 school bond issue—which was used at the time to pay for renovations at the three lower elementary schools and the , and an addition to the , Shugars said.

The successful low bidder, Roosevelt & Cross, Inc., came in at a rate of 2.67 percent, leading to a $1,559,326 (6.652 percent) reduction in payments, or an average of $91,725 per year in savings for the next 17 years.  

The district had been paying an interest rate between 4 to 4.25 percent.

The total savings turned out to be roughly $700,000 higher than the initial estimate the board received from its financial adviser, Shugars said. The enhanced final savings was a result of market improvement through January and February, as well as the strong “AA” rating the district received from Standard & Poor’s on the bond issue.