Goodrich-By a 6-0 vote on Monday night the board of education OK’d the refinancing of its 2005 and 2000 bonds, in a move that school officials say will save the school district more than $3 million. Board Secretary Dan Keller was absent.
At 1:30 p.m., Feb. 23, the 2015 refunding school district bonds in the amount of $9.41 million were sold.
‘We had three very competitive and very close bids proposed for the district bonds,? said Michelle Imbrunone, district superintendent.
The investment bank of R.W. Baird was the winning bid for the district bonds that range in value from 2 -3 percent for 10 years.
‘It’s a huge vote of confidence for the school district,? she said. ‘The bidders really were impressed with the long term fiscal responsibility of the district and the proactive approach to debt the board had taken,? she said. ‘It’s a real win-win for the taxpayers and the outlook for the district.?
Last November the board OK’d Stauder, Barch & Associates? analysis of refunding the 2000 and 2005 bonds. The analysis showed the potential for cost savings to Goodrich, and ultimately, the taxpayers in the community. Estimated cost avoidance due to having to borrow less from the School Bond Load Fund and then being able to repay the SBLF at a faster pace is $2,246,841. Additionally, a lower interest rate on refunding the bonds is estimated to be $1,116,336. This brings the total potential cost avoidance to $3,363,177, according to a statement by Imbrunone. The vote comes after a resolution was adopted at the Aug. 25 board meeting to pursue refunding of the 2005 bonds. Further analysis by Stauder, Barch has showed the potential for even greater cost avoidance if the 2000 Series B Bonds are refunded as well.
The SBLF was established in the State Constitution and implemented by state law so all K?12 school districts such as Goodrich have the option of applying to the state to have their upcoming debt ‘qualified.?
According to the Michigan Department of Education if for any reason, a school does not make principal and interest payments on the bonds, the state is required to lend it the amount of the shortfall. Thus, the state guarantees the qualified debt of a local school district and a district can then borrow under the state’s credit rating. Also, if a school district levies the required maximum mills for debt service, it has the option of borrowing the additional amount needed for annual debt service directly from the state. This interest-bearing loan must be fully repaid after the bonds have matured.
In 2012 all districts participating in the SBLF program were required to recalculate their computed millage rate. If that rate was determined to be insufficient to repay their bonds and loans by the mandatory repayment date, the district would be required to raise its debt millage rate to taxpayers.