The Salina USD 305 school district is saving over a half million dollars by refinancing bonds. According to the district, the school board Tuesday night approved refinancing bonds that will save the school district $533,419.
“As good stewards of the community’s tax support to have quality facilities for our students, we are pleased to refinance bonds to save $533,419,” said Dr. James Hardy, superintendent. “Cumulative refinancing results have saved $5,255,669 in taxes. This has helped to keep our projected bond mill levy well below the estimate that was predicted at the time of the bond issue passage.”
The district’s old bonds had an average interest rate of 4.33 percent that is being replaced with an interest rate of 2.74 percent. The District has always looked for opportunities to lower the interest expense and generate a savings for the taxpayers in the District. Since 2001 the District has completed several bond refinancings.
The bonds are related to a 2014 bond issue to fund construction and renovation of schools throughout the district. The bond refinancings and resulting savings have allowed the District to set the mill levy for the repayment of the bonds well below the estimated mill levy shared with voters during the bond election campaign.
Moody’s Investors Service assigned a bond rating of “Aa2” to the District. The strong credit rating is a result of the district’s cash reserves and its moderately sized tax base serving as economic center for the region. Maintaining a favorable bond rating is important for the district as it helps to lower the interest rate on the bonds and, in turn, reduces the interest expense for the taxpayers in the district.
According to Greg Vahrenberg, Managing Director at Piper Jaffray & Co., Salina USD 305’s bond rating of “Aa2” is well above average for school districts in Kansas and nationally. In Kansas there are only two school districts with a bond rating in a higher rating category.