Refinancing saves school district year of bond payments
Interest rates make process worthwhile.
With interest rates inching toward record lows, many home owners are looking at refinancing their mortgages to save money.
School construction bonds work similarly.
In March, the Brady school board gave D.A. Davidson of Omaha the authority to seek interest rates for the best possible outcome of refinancing the school’s construction bonds.
After two months of waiting through of ups and downs in the stock market, paperwork is complete and a savings of more than $311,000 is in store.
“It’s one more way to save the taxpayers money,” said school superintendent Bill Porter.
District voters approved a $4.625 million addition and remodeling project in September 2005. Officials broke ground in May 2006 and students and staff moved in for the 2007-08 school year.
“For a growing school district, it was a project that had to be done,” said Porter, who began working in Brady in August 2009, long after the building project was complete.
But the cost of the construction continues to put a strain on local taxpayers who coughed up 25 cents per $100 in valuation on top of the $1.05 general fund levy for the district this year.
Refinancing, Porter said, will save the district $311,417 over the life of the bonds which now mature in 2030.
The total savings is nearly a year’s payments as the district puts approximately $334,000 toward the bonds annually.
The savings won’t come in a lump, Porter said, but instead will be seen over the entire period of the bonds.
The total indebtedness, Porter said, is more than $6 million because of the interest that must be paid on the original construction cost of $4.625 million.
It’s possible if rates continue to drop that the district could refinance again for additional savings.
Porter said the school board will take another look at the bonds in five years.