BCSD #101 refi to save taxpayers $209,815

By KATHY NUSSBERGER

Managing Editor

Boundary County School District #101 Superintendent Don Bartling, announced that the Board of Trustees decision to refinance the 2003 General Obligation Bond will save taxpayers $209,815. The initial principal amount of the 2003 Bonds was $11 million, with a principal amount of just over $6.2 million still owed.

"At the April 19 District meeting, the Board adopted a Bond sale resolution of its 2003 General Obligation Bonds, which will realize a gross savings of $209,815 over the 14 years left on the outstanding bonds," Bartling explained. "We began this process over six months ago, however, the district was informed by Wells Fargo Bank that the interest rate market was not conducive to producing a savings at that time."

Bartling added that the District had set specific parameters that had to be met before they would sign off on a refinancing plan.

"The District had set a minimum gross interest savings of $200,000 over the remaining 14 years of the outstanding bonds, which is at least a 2 percent savings," Wells Fargo Public Finance Officer Bud Way said. "On April 19, the municipal market finally maintained a level that allowed the District to accomplish this goal and resulted in a 2.203 percent savings to local taxpayers. Boundary County School District is the only school district that has been allowed to take advantage of this market in the last six months."

Way added that advance refunding is a financing technique that allows an issuer to obtain the benefit of lower interest rates when the outstanding bonds are not currently callable.

"These savings are affected by many factors, including the spread between current rates, the rates of the outstanding bonds, the amount of bonds outstanding, and the time remaining before the bonds are callable," Way explained. "Due to the District's improved financial condition over the past five years, these bonds were very well received in the market."

Bartling explained that these bonds provide no direct savings for the District, only local taxpayers.

"The refunding of the bonds is like refinancing a home mortgage and obtaining a lower interest rate," Bartling said.

According to the Wells Fargo Public Finance Officer Bud Way,