September 9, 2015
Bonner Springs-Edwardsville USD 204’s effort to refinance 2005 bonds has resulted in a larger-than-expected savings.
The district conducted a bond sale Sept. 8 to refinance $6.67 million in bonds and achieved a net present value savings of 15.98 percent.
“That’s almost unheard of,” Eric Hansen, director of business and human resources, said. “In all the years that I have been doing this, the most I’ve ever seen was a little over 10 percent.”
The 2005 bonds had an interest rate of 4.79 percent and were set to mature between 2019 and 2023. Six banks placed a bid on the bond sale, and the lowest bid came from Country Club Bank, which offered an interest rate of 1.65 percent.
Refunding the bonds created an annual interest cost savings of $142,093, with a total of $1,136,744 saved over the next eight years.
The district was able to pay off $2.89 million in 2005 bonds set to mature in 2024 and 2025 early, known as early redemption. The interest cost savings for the redemption is $130,275 annually, or $1.3 million over the next 10 years.
Hansen said the total combined savings was $2,439,494; the district originally thought refinancing would save it about $2.3 million. Because the state provides 31 percent in aid for bond payments, he said the refinancing saved the state $756,243.
“I think it really helps emphasize that schools are constantly looking at how to improve their own bottom line, but also the bottom line for the state,” he said.
The Board of Education approved the resolution for the bond sale unanimously; Board member Tim McGinnis did not attend the meeting.
In other business, the board:
• Approved a total of $37,500 in expenditures for the Bonner Springs Family YMCA. The facility plans to install a large fan in the fitness center ($7,500), replace the Y logo on the building as required by the corporate office ($7,500), make parking lot improvements ($11,000), and install monument signs by the 138th Street entrance ($3,500) and at K-32 and 138th ($8,000).
• Learned that the chairs ordered for the renovation of the high school auditorium were given the wrong padding, and correcting the problem will cause a delay in installation. The chairs are set to be installed Oct. 8; the contract for the renovation called for it to be complete Oct. 1.
Originally published at: http://www.bonnersprings.com/news/2015/sep/09/usd-204-save-244-million-refinancing/