Brandon Twp.- The school board voted 6-0 at their Dec. 21 meeting to complete refinancing of bonds, saving the district about $12.4 million over the course of the loans.
The board directed their financial adviser RJ Naughton and underwriter, Craig Taylor, to begin pursuing the sale of bonds and obtaining the lowest interest rate possible on both the voter-approved 2006 bond, as well as the School Bond Loan Fund, money borrowed from the state to meet bond payments.
‘We have successfully refunded our bonds with a projected savings of $12.4 million for the taxpayers over the life of the loans,? said Superintendent Matt Outlaw.
The district sold $47,635,000 in 2015 refunding bonds in November and $46,220,000 in 2016 bonds last month. The 2015 bonds were money owed to the School Bond Loan Fund. The district currently levies 13 mills for the School Bond Loan Fund as a result of Public Act 437, passed in 2012 by the state legislature. The bill helps the state improve its bond rating and shortens the timeframe that districts have to repay loans, but caused a massive jump in tax bills here, where 8 mills was previously levied for repayment of school bonds.
The district was paying a 3.440 percent interest rate, but refinanced the bonds at 2.25 percent, saving $7,167,000.
The 2016 bond refunds the district’s 2006 School Building and Site Bonds. Voters passed a $72.9 million bond in 2006, which was used for several major renovations, including technology upgrades, construction of Oakwood Elementary School and an activities complex at the high school. This bond was refinanced at 3.34 percent, saving $5,235,000.
Eighty percent of the outstanding debt will be paid over the next decade. Additionally, the district’s credit rating was raised by Standard and Poor’s from a B+ to A+.
‘The district’s efforts to reduce expenditures and stabilize its financial conditions was the driving force in this increase,? said Outlaw. ‘To me, this is a direct reflection on our board of education and their commitment to improving the financial health of the district… We appreciate the investment that the community made in our schools in 2006 and are pleased that this refinancing will bring such significant savings to taxpayers.?