While the Leavenworth school system didn’t see as much in savings as officials had hoped, the district will save $636,267 through the refinancing of bonds.
Bonds that were issued in 2008 and 2009 as part of a $58 million bond issue are being refinanced through the sale of refunding bonds in order to take advantage of lower interest rates.
According to the Kevin Gullett, chief financial officer for the district, the rates and amounts for the new bonds were finalized last week. The closing date is scheduled for Dec. 27.
Gullett said he is excited to get the refunding bonds sold and save taxpayers money.
Leavenworth school board members approved a resolution Monday night to finalize the issuance of the new bonds.
“That was just a formality,” Gullett said.
He called the bonds being refinanced “targeted” bonds. He said they were selected for refinancing because they had the highest rates attached to them. If the district had tried to refinance additional bonds at the same time, they would have been faced a slightly higher interest rate.
He said district officials may look at refinancing additional bonds in the future.
The total debt service for the 2008 and 2009 bonds that were targeted for refinancing is $14.83 million with an average interest rate of 5.23 percent. The new debt service is $14.19 million with an average interest rate of 2.73 percent.
This is estimated to save $636,267 over the life of new bonds. The bonds and interest are scheduled to be paid off in 2029.
When board members authorized the sale of the refunding bonds last month, officials projected a savings of as much as $1 million through the refinancing process.
But Gullett said other entities also have been selling bonds, which flooded the market.