Bond refinancing brings savings for taxpayers
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RONAN – Thanks to Ronan School District keeping a close watch on their 2001 General Obligation Bonds’ interest rates, the district will be saving its taxpayers a significant amount of money over the next ten years. The overall gross savings realized by the issuance of the refunding bonds totaled $895,453, or approximately $83,000 a year local taxpayers can keep in their pockets. They will experience lower debt service levies for the remaining 10-years of the 20-year term.
According to a press release, the 2001 bonds were approved by the districts’ voters on February 6 for the purpose of constructing the middle school facility, including a food service complex, a full-size gymnasium, weight room, wrestling room, a band/choir complex and remodeling of the high school lockers.
“This is a very positive thing for our taxpayers,” Ronan School District Superintendent Andy Holmlund said. “It was wonderful that our school district was in a position to do this for our taxpayers.”
According to a press release, the bonds were issued in 2001 by Ronan Elementary and High School Districts in an original principal amount of $6,670,000 and $2,820,000, for a total amount of $9,490,000 for a 20-year term. The refunding bonds are now outstanding in the total principal amount of $5,630,000, with a ten-year remaining term.
When the district sold the bonds in 2001, their interest rate was between 4-5 percent. With the global economy on the downward slide, the interest rates recently dropped to 2.07 percent, providing a good opportunity for the district to refinance their bonds and save a large amount of money for local taxpayers.
“The global economy is down in Germany and Europe,” Holmlund said. “The slow economy pushes the bond market down, and now we don’t have to collect $900,000 from our district taxpayers.”
The bonds were offered locally to individual and institutional investors through D.A. Davidson and Company. According to a press release, the outstanding bonds were first subject to redemption and prepayment after half of the term of the bonds, which occurred on July 1.
“This is a big deal,” Holmlund said. “I’m extremely happy for the district and its taxpayers.”
