D-B to save quarter-million in refinancing
Published 12:00 am Thursday, July 20, 2006
COAL GROVE — Officials compare it to the refinancing done by many homeowners around the nation, only in this case, the home in question belongs to Dawson-Bryant students, and the move could save taxpayers nearly a quarter of a million dollars.
In 1995, the Dawson-Bryant school district chose to finance $2.17 million for a new high school. In the nine years since it was passed, the principal of the loan has been paid down to $1.6 million, and district treasurer Jim Tordiff and other school officials thought the time had come to look into lowering their payments.
“It’s no different than refinancing your house, taking advantage of better interest rates as the mortgage goes on over the years,” Tordiff said. “We saw an opportunity and we felt like we had an obligation to minimize the costs for the taxpayers of this community.”
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The school began looking into the change six months ago, bringing in a team of experts to help them pursue savings. The district then had to go through a lengthy bond prospectus, letting potential investors know what sort of financial state the district was in.
Luckily, the original financing was in the form of what are called callable bonds, which can be redeemed before their maturity date. Tordiff said that if the 1995 school board hadn’t had the foresight to take this step, Dawson-Bryant would have been stuck with its old interest rate, far higher than what’s currently available.
Although interest rates have varied since the bond was instituted, the average has been 6.58 percent, as compared to the current rate of 4.39 percent. To put it simply, the new financing will translate to an actual savings to the school district voters of $222,358.75.
While this will mean those in the Dawson-Bryant area will be able to save some money, Tordiff said that the school district itself wouldn’t receive any benefits … or at least no benefits that are financial.
“The only benefit the board of education would is knowing that they’re doing all they can to save the taxpayers whatever they can,” Tordiff said.