Interest rates save money on school bond
A second round of bond resales will save School District 51 taxpayers $4.4 million.
The district holds $113 million in debt from a $44.13 million bond issue passed by voters in 1996 and a $109 million bond issue passed by voters in 2004.
District 51 refunded $76.575 million worth of bonds in September, which means the district resold its bonds to other investors to drop its old debt and interest rate and take advantage of new rates between 0.6 and 3.23 percent.
The district had been paying 3.8 percent to 5.25 percent interest on its bonds since 2004, according to District 51 Executive Director of Support Services Melissa Callahan DeVita.
The district refunded another $7.56 million in bonds July 11 to get new interest rates between 0.35 percent and 2.25 percent.
DeVita said the district chose to refund fewer bonds this summer because districts are allowed to refund the same bonds only once every 10 years, so most bonds were already off-limits for a refund.
“We did a lot last fall because it made sense. We hit an all-time low up to that point and now they’ve dropped even lower,” DeVita said, referring to interest rates. “When you get these all-time lows, you want to take advantage.”
DeVita said bonds should have maturity dates at least a few years out to make refunding worth the trouble. She said the district is out of bonds with long enough maturity dates to make refunding worthwhile, at least for now.
The district’s bond debt will take just as long as before to pay off, which means a final payment in 2024 as long as no other bond issues are approved by voters before that year in District 51. The refund process will make principle and interest payments smaller, which shaves a tiny amount off of each home- or building-owner’s property tax bill within District 51 boundaries for the next 12 years.