Somerset School District to refinance up to $1,750,000 worth of debt
In an effort to ease the financial strain on the school district, members of the Somerset Board of Education, Monday night, approved a Resolution Authorizing the Issuance and Establishing Parameters for the Sale Of Not To Exceed $1,750,000 General Obligation Refunding Bonds.
According to District Director of Business Services & Operations, Dave Gerberding, the district could realize a potential present value savings of 3.2 percent, or approximately $57,000 over the next three years.
The debt being refinanced originated with a referendum passed in 2000.
The resolution having passed, the business office will provide information to Baird and the bond attorneys, Quarles & Brady, then request a ratings call with Moody’s after which Baird will facilitate a sale of a new bond at a lower interest rate (used to pay off the current bond). The resolution establishes that the present value debt service achieved by the refunding shall be at least 2 percent of the principal amount.
Baird will have a specified time frame in which to sell the new bond at favorable market rates.
According to Gerberding, the end result of this process is that the district will pay less debt service over the next three years, and will decrease the levy needed for debt service over the three years, thus saving taxpayers money.