Swanville School bonds to be refinanced for taxpayer savings
By Jennie Zeitler, Staff Writer
The Swanville School Board authorized the refinancing of school building bonds that were issued in 2005.
“This is similar to refinancing a home mortgage, except that other requirements are in place for a school district. Right now Swanville’s bonds meet those requirements,” said Ehlers Financial Adviser Jodie Zesbaugh at Tuesday’s Board meeting.
“Federal law requires that the refinancing accomplish at least 3 percent of present bond value in savings. We get excited at 5 percent,” said Zesbaugh. “Swanville is currently at 8 percent present value savings and that is great.”
The Board set the sale date for Wednesday, Oct. 3 at an interest rate no less than 5.5 percent. The percentage can not be lower, but it could possibly be higher for even greater savings, depending on where interest rates stand Oct. 3.
“Interest rates vary daily, and we don’t know what the bids on the bonds will be in advance,” said Zesbaugh. “The Board approved a sale assuming that a savings of at least $290,000 would be achieved, which would be 5.5 percent.”
The savings to the district’s taxpayers will be spread over 11 years, and is projected to average $36,000 to $40,000 annually, for a total projected amount of $420,000.
As the district goes through the levy process each year, the levy amount will be reduced for 11 years because of the refinancing
“That is a direct savings to the taxpayer and cannot be used for any purpose,” Zesbaugh said. “If interest rates rise before that date and we don’t think we will achieve that amount of savings, we can postpone the transaction and try again at a later time. We’re looking to make a transaction that will capture some savings and be fantastic for the taxpayer.”
“Any time we can save the taxpayers money, it’s a good decision,” said Board Chair Jay Loven.
Other business that came before the Swanville School Board Tuesday included:
• Certifying the proposed levy for taxes payable 2013 at a 2.97 percent decrease;
• Approving the hiring of Alyssa Thies as a .5 full-time equivalent (FTE) speech assistant; Shannon Bjorge as a second grade teacher; Julie Conrad as a .348 FTE Title I teacher and Brianna Brummer as a paraprofessional;
• Learning about the $3,000 planning grant that the district received from the Initiative Foundation for the new baseball field;
• Setting the Truth in Taxation hearing date as Dec. 11 during the regular school board meeting; and
• Hearing that current elementary enrollment is 181 and high school enrollment is 152 for a total of 332. That is higher than the projected 322; and
• Learning that interactive white boards have now been installed in all of the elementary classrooms.
The next regularly scheduled meeting of the Swanville School Board will be Wednesday, Oct. 24 at 7:30 p.m. in the media center.