New interest rate saves us $500,000
By securing a new interest rate on one of its future debt accounts, Alexandria District 206 School Board has saved taxpayers about $500,000.
During Monday night's school board meeting, the board approved "Refunding of 2008 Debt Issuance" to cover the district's future debt service of $6.3 million.
The new interest rate approved came in at 3.19 percent, compared to the old interest rate of 6.87 percent.
The actual net savings to taxpayers is $507,446 over the life of the bond.
School District 206 Business Director Trevor Peterson said, "By refunding these bonds, it's the same concept as homeowners refinancing their home mortgage. With interest rates at a historic low, the timing of this refunding bond sale will provide local taxpayers a savings of more than $500,000 over the life of the new bonds."
Peterson explained, in 2008, a new law authorized government entities, including school districts, to issue bonds to cover "other post-employment benefits," or OPEB. An actuarial study estimated the long-term liabilities for retirees to determine the original bond amount. With support from Education Minnesota Alexandria (EMA), the school board exercised the option to bond for post-employment benefits. In doing so, the district freed up approximately $520,000 of general fund dollars that are used to fund three initiatives:
--All-day everyday kindergarten
--Digital classrooms of the future and other technology needs
--Supporting student learning (at-risk programming)
Based on the debt structure, the refunding will decrease the OPEB portion of property taxes beginning in 2018. The refunding will result in about $40,000 average cash flow savings for the school district beginning in 2019.
Stacy Childers, assistant vice-president of Springsted Incorporated in St. Paul, told school board members Monday night, "We had a very successful bond sale this morning."
There were three bidders for the bond sale.
In other action during Monday's meeting, the school board:
--Awarded a bid for $62,303 to FLRSanders of Princeton for wood flooring work to be done at Alexandria Area High School. The project will include 1,692 square feet of stairs made of prefinished maple with walnut inlay on the stair treads. The "learning stairs" will be located in the main commons area.
--Approved a resolution identifying probationary staff members whose positions may be reduced or discontinued in the upcoming school year due to changes in student enrollment and/or the availability of funding. The list includes 22 positions in art, physical education, English, learning resources, speech, math, early childhood and agriculture.
--Approved a resolution identifying tenured staff members whose positions may be reduced in the upcoming school year due to changes in student enrollment and/or the availability of funding. The list includes nine teachers from business, family and consumer science, social studies, science and learning resources.