Interest reduced on school bondsPublished 9:11am Wednesday, April 10, 2013
In 2006, Ironton residents voted in favor of an $18 million school issue and bond levy, coupled with $32 million in state funds, to pay for a new elementary, middle and high school.
Recently, the school board refinanced $8,240,000 of those bonds and plans to pass the savings along to the district’s tax-paying citizens.
When the bonds were sold, the interest on those bonds was 4.9 percent. By refinancing, the interest was lowered to 3.23 percent, saving the district taxpayers about $550,000 over the life of the loan until 2034.
Dean Nance, superintendent of Ironton Schools, said the opportunity to refinance the bonds is a good move for the community.
“Over the duration of the loan, that’s going to save more than half a million dollars,” Nance said. “There are some more that will be eligible for refinancing after January 2014, and we will be monitoring them to see if we can save the taxpayers more money.”
Katie Kleinfelder, bond underwriter for RBC Capital Markets, the firm handling the bonds, said about $3,955,000 more in bonds could be refinanced next year if market conditions are good. Kleinfelder also said this year’s refinanced bonds will be eligible for refinancing again in eight years.
When the 8.2 mill levy went on the books, property owners paying taxes on a $100,000 home paid $251.13 a year. The savings could be reflected in a reduction in school taxes paid by the citizens next year, Nance said.
Whether the refinancing will lower the millage, and by how much, on the levy has yet to be determined by the Lawrence County Budget Commission.
Lawrence County Auditor Jason Stephens said his office would look at the district’s bond repayment schedule after the second half of the county’s property taxes have been collected in July. The repayment would be compared with the revenue that is generated by the levy to ensure there is enough revenue to cover the payments.
“As the budget commission we work with other school districts and want to work with the Ironton school district if they choose to do the refinancing,” Stephens said. “So long as the numbers work, it’s what that community wants that is what’s important.”
Nance said refinancing the bonds was a smart financial move on the school board’s part.
“The board of education is very cognizant of the fact that we live in an impoverished community and that water bills keep going up, property taxes keep going up, everything is going up,” Nance said. “I am very proud of our board for being proactive in protecting the interests of our taxpayers in this community and for being responsible to the community taxpayers.”