USD234 has some great news.
The board of education recently approved a bond refinance, according to Gina Shelton, business manager for the school district.
“This saves our community $5,792,515.15 and allows us to pay the bond off 5 years earlier,” she said. “We continue our commitment to be good stewards with our taxpayer funds and are so very excited to have this opportunity.”
In a 7-0 vote, USD 234 School Board approved Resolution 19-09 on March 2, 2020, to refinance a portion of the District’s outstanding Series 2014 General Obligation Bonds to take advantage of lower interest rates and captured savings for our community of $5,792,515.15. As a result of the refinancing, the District will pay off the bonds five years earlier than originally planned.
Series 2020 Taxable General Obligation Refunding Bonds Highlights
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The final average interest rate after refinancing is 2.57%.
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Total savings is $5,792,515.15 (after all refinancing expenses).
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As a result of the refinancing, the District will pay off the bonds five years earlier than originally planned, with a final maturity in 2035, versus 2040.
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The refinancing improves the District’s financial position, provides interest cost savings and future mill levy management options.
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Timing – Why is this important??
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Past
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School District and Community passage of bond was just in time.
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The initial bonds were passed on December 22, 2014.
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Legislation became effective July 1, 2015, that lowered the bond state aid.
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We are currently receiving 64% in state aid.
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Had we waited, our community would have been receiving 33% state aid.
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In 2019-20, the state aid is paying all the interest on the school district’s bonds and some of the principal of the bonds.
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Now
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Interest rates are at a historical low.
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The school board’s goal with refinancing was the capture the lower interest rate currently in the market.
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History has shown us that interest rates will go back up, so it is critical to take advantage of the lower rates now.
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