BEMIDJI – The school district is saving more than $2.2 million by refinancing bonds.
The district will save $2.28 million in the next six years after the Bemidji School Board members on Monday approved the sale of more than $17 million in bonds left from the construction of Bemidji High School and Lincoln Elementary.
The district, through its consultant Springsted Inc., received 10 bids on the refinancing of bonds. The low bid – at .898 percent – was from Bank of America Merril Lynch in New York.
“It’s just all good news,” Chris Leinen, the district’s business manager, said Tuesday morning.
Leinen credited the district’s well-managed finances, a stable fund balance, increasing enrollment and a strong local economy as factors with contributing to a good bond rating.
“We ended up with an interest rate of less than 1 percent,” he said, noting that the bonds will now be completely paid off in 2019.
District taxpayers will benefit from the savings as its annual levy is directly tied to district debt, Leinen said.
Once the bonds, which originally totaled $48.8 million in 1998, are completely paid off, the district will have very minimal debt, Leinen noted
Leinen first brought the opportunity to the school board in November, projecting that that if markets remained steady, the district could save up to $2.1 million by refinancing the bonds.
As it turned out, the district will save even more.
“The markets have been up and down, but we were fortunate to have 10 bidders, which is really a good sign for us,” Leinen said. “I think it speaks to the quality of our proposal. We have a very strong bond rating.”