CARY – The planned bond sale by District 26 went better than expected.
On Dec. 3, the district had a bond sale as it refinanced $5.54 million in bonds.
The move originally was estimated to save the district $487,000 in interest costs over the life of the bonds, which are scheduled to be paid back by 2019. After the sale of the bonds, the interest savings is almost $493,600, according to district documents.
According to district officials, the district’s recent bond rating upgrade helped it receive better interest rates, which helped save the district a little more money than projected.
To help the deal go through, the district also anticipated it would have to inject $240,000 at the close of the bond sale.
That amount was reduced to $155,000, Director of Finance and Operations Jeffrey Schubert said Monday when discussing the bond sale at a finance committee meeting.
The refinancing was part of the district’s efforts to keep its pledge it made in 2010 as part of the bond referendum that had passed. Officials had pledged to have a roughly $20 annual increase over four years in property tax bills for the average house that was worth $300,000 in 2010.
Earlier this month, the district received an AA bond rating from Standard and Poor’s. That rating is up from the district’s A2 rating with a negative outlook Moody’s gave to the district in 2010.
“It’s another indication our financial [condition] is improving,” Superintendent Brian Coleman said. “I wish the state was also improving, because that was one of the issues in selling bonds. A lot of the bidders were reluctant to bid because of the finances of the state.”
The district also anticipates it will save money on its next contract to lease buses. Under a proposal from Midwest Transit, the company from which the district currently leases its buses, the district will reduce its annual leasing costs by $81,000.
Under the proposed three-year contract, the district will lease 35 buses for about $329,000 a year. The district plans to lease four fewer 72-passenger buses because of declining enrollment and more efficient routing, according to Schubert.
“These savings are attributed to the reduced fleet and more favorable interest rates,” Schubert wrote in a district memo.
School board members are scheduled to vote on the new bus lease at their meeting on Monday.