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District bond refunding nets $978,000 in present-value savings, staff to monitor 2017 bonds
Summary
The Saginaw School District reported selling $10.8 million in new bonds on March 5 to refund 2016 debt, producing $1.1 million in reduced debt service and $978,000 in present-value savings; staff will watch markets for a possible 2017-refunding opportunity in January 2027.
The Saginaw School District told the board on March 18 that a refinancing of older debt produced substantial savings.
Superintendent R. Roberts introduced the item and bond advisor Bill Roche reported that the district sold $10,800,000 in new bonds on March 5 to refund 2016 bonds, "resulting in $1,100,000 in reduced debt service and $978,000 in present-value savings," a present-value savings rate Roche said was 8.5 percent—well above the commonly used 3 percent guideline. Roche told the board staff will "monitor market conditions for a potential refunding of the 2017 refunding bonds in early January 2027 and report opportunities to the board."
The presentation explained the refinancing was oversubscribed and met Treasury present-value expectations; district staff said they would return with recommendations if market conditions make a further refunding advantageous. The board did not take immediate action on the bond item; the presentation summary said the matter "will be on the Consent Agenda for approval next week."
