The Ignacio School District refinanced and sold bonds in early March – saving taxpayers $345,276.
The district made the savings possible by selling and refinancing about $8.1 million of taxable bonds at lower interest rates. It’s not the first time district staff members have taken advantage of opportunities to refinance. In 2016 and 2017, the district saved taxpayers about $1.2 million by refinancing 2012 bonds.
“Since we already saved this much money, it’s going to be less on the real estate taxes that they will have to pay,” said Rocco Fuschetto, district superintendent.
In 2011, the district sold almost $50 million in bonds to pay for new facilities. They were scheduled to repay the debt over 20 years.
Since then, district staff members, with the help of Stifel Public Finance, have been watching changing interest rates and waiting for a good time to refinance.
In January, the district began preparing to refinance. The school district originally planned to sell the refinanced bonds at the end of March. But Stifle said the interest rates were rising again and the district “needed to sell now.”
One day, the savings would have been $325,000. The district sold the next day and got a better deal: The savings jumped to about $345,000, Fuschetto said.
“That’s what I was advised to do, and we jumped at the opportunity,” he said. “That’s why we were able to save a little bit more money.”
By refinancing, the district shortened the payback period to 2027, instead of 2031, and lowered the interest rate. The savings will be placed in escrow and will be used to pay off 2012 bonds on Dec. 1. The district and its taxpayers will see cost savings on taxes from 2022 to 2027.
The district was able to refinance because of its strong financial position. Moody’s Investors Service gives the district an A1 rating based on its finances over the last five years. Moody’s examines factors such as assessed valuation, expenses, revenue and cash balance.
Investors see that rating and feel safe getting involved, Fuschetto said.
In total, the process took two months, he said.
“We could’ve said, ‘No, we don’t want to do this, we’re fine,’” Fuschetto said. “We want to be very financially conscientious. We want to reduce the financial burden on the community.”