EPS discusses refinancing bondsPublished 10:37am Thursday, August 30, 2012
A resolution Edwardsburg Board of Education adopted Monday night could save district taxpayers by refinancing bonds, which included the intermediate school.
“Interest rates are at an extreme low and continue to remain that,” said Anne Flautt, chief financial officer. “That presents an opportunity for us to potentially acquire some savings through a refinancing of our 2004 debt.”
Flautt said the district looks at bond refinancing when savings of at least 3 percent are feasible.
“We’re estimating right now savings of about 7.29 percent on the ’04 bonds if they were to be refinanced,” she said. “Although our ’04 debt bonds are not callable until May 2014, there is an option to refinance and place these funds in a refunding escrow account.”
District financial advisers recommend waiting until market conditions change such that an increase in interest rates is expected.
“We could then begin refunding to take advantage of the low interest rates,” Flautt said. “The closer we are to the call date, the greater our savings will become because of the reduced cost of having to set up an escrow account.”
She and Supt. Sherman Ostrander recommended adoption of the resolution, which authorizes an immediate beginning to refinancing “if it looks like interest rates are going to go up,” Flautt said. “Without this resolution, we would have to wait for the next board meeting after we hear interest rates are going to fluctuate and we could miss our opportunity for savings.”
“The bottom line is we want to maximize savings for our constituents,” Ostrander said.
Board reaffirms CIPA compliance
The school board reconfirmed Edwardsburg Public Schools’ compliance with CIPA, the Children’s Internet Protection Act.
Congress enacted CIPA in 2000 to address concerns about children’s access to obscene or harmful content.
The district has been compliant since Aug. 22, 2001, by enforcing an acceptable use/ safety policy, including online content filtering.
Millage rates set
A resolution establishing millage rates for 2012 provides for the general fund a levy of 18 mills on non-homestead property to be used for operating purposes and 4.25 mills for debt to meet three bond obligations from 2004, 2006 and 2009.
“In ’05, the levy was 5.98 mills,” Flautt said. “Last year, the winter of 2011, our levy had dropped to 4.5 mills. Due to the refinancing of some of our debt in 2009, we were able to acquire a lower interest rate, and properties have not fallen nearly as dramatically as we’ve seen in other areas of the state.”
Tags: Edwardsburg school board