Board approves saving move
Residents attending Monday night’s board of education got a lesson in what good credit can do for you when with one vote, the district saved $167,000.
Business manager Cathy Somich brought a measure before the board requesting approval on refinancing of some of the debt left over from a 2002 school district building project.
Somich said the school’s excellent credit rating, decreasing debt and recent activity in the market seeking buyers for the EXCEL building project drew interest in some of the school’s older BANs (bond anticipation notes).
The bond company, Roosevelt and Cross, contacted the school and offered the district a better interest rate on the 2002 notes.
Somich said the company initially bid on the EXCEL project bonds and missed out by not offering the lowest rate of the bidding companies. When looking at the school district Roosevelt and Cross became interested in other, older debt and contacted Somich.
The move was similar to refinancing a mortgage, Somich said, and the amount saved was over the course of the remaining payback years left on that particular building project. The notes are typically paid back over 15 years and the $167,000 saved will be in less interest paid over the remaining payments, approximately $27,833 a year. Unlike a refinancing this move does not have any type of closing costs. “It’s a real win-win for us,” Somich said.
The move was unanimously approved by the board.