Board of Education approves issuance of new bonds
Refunding existing bonds to save nearly $3 million in interest
The Board of Education on Monday, June 3, 2019, approved the first sale of general obligation bonds related to the bond issue approved by voters in May 2018. The Board received nine competitive bids and selected Morgan Stanley to award bonds with a lowest total interest rate of 2.42 percent. This sale represents one of the lowest total interest rates the district received in recent history.
The Board is issuing $35 million in bonds, the first of three sales over the next three years. Structuring the 2018 bond issue in this manner allows the Board to move forward with projects without an increase in the bond and interest tax rate.
In addition to the issuance of new bonds, the Board will refund $13,780,000 of existing bonds (series 2009) at the new lower total interest rate of 2.42 percent. This strategic decision will save taxpayers nearly $3 million in interest expenses. Refunding bonds will not extend the term. The district will pay off the bonds on schedule.
One of the reasons the school district received the lower interest rate is due, in part, to its strong financial rating of Aa2. The excellent rating is attributed to sound fiscal management and financial health of the school district.
By the time new bonds are issued, the district will have reduced its debt by more than $78 million since 2010. Because the estimates for paying back the bonds over 20 years are conservative, the tax rate will not only stay below the current rate, the district believes it will continue to decrease. Plus, the Board is retiring debt faster than any new bonds would be added.