Bond refinancings by Lindbergh Schools save taxpayers nearly $4 million since 1998

By Mike Anthony, Executive Editor

Lindbergh Schools has saved taxpayers nearly $4 million since 1998 by taking advantage of lower interest rates and refinancing bonds issued by the district, Chief Financial Officer Pat Lanane said last week.

By refinancing bonds in 1998, 2001, 2004, 2008 and 2010, the district has saved taxpayers a total of $3,872,915, Lanane told the Board of Education Dec. 13.

“… This is not money that the district has saved and now the district has to spend … Just like your house loan, if you refinance that, that’s money you’re not sending the bank. The bank hasn’t got any more money to spend. It’s the person paying the mortgage and the same thing is true here. It’s not the district that has any savings or money to spend. It’s the taxpayer who’s making that payment,” he said.

“So this is money that never had to be put out by the taxpayers that if we had not done the refinancings, they would have had to spend. So by getting the lower interest rates, by lowering the maturity schedules, you save the taxpayers money, keeping the tax rate lower than it otherwise would have been …,” Lanane said.

Of the savings taxpayers have realized since 1998, he said, “In Lindbergh’s point of view, this is just what we do on a regular basis to make sure that those borrowing costs are kept to a minimum …”

Board of Education President Vic Lenz noted an upcoming proposal to refund general obligation bonds issued in 2003 could save district residents as much as an additional $500,000.

“… If I’m remembering right, the one that we’re working on right now is another $500,000. So if that was added to it, you’d be talking $4,372,915,” he said, noting, “That’s a sizable chunk of money …”

As proposed, Lindbergh would sell $9.07 million in general obligation bonds to re-fund the bonds issued in 2003.

Because the 2003 bonds are not callable until March 1, 2013, the proceeds from the sale of the refunding bonds would be used to purchase U.S. government securities, which would be deposited in an escrow account. The principal and interest earned on the government securities would be sufficient to retire all the debt associated with the 2003 bonds when they are callable.

In a separate matter last week, the Board of Education voted 6-0 to adopt a resolution opposing a proposal to replace the state in-home tax with a new 10-percent sales tax.

Board member Mark Rudoff was absent.

The resolution opposing the “Everything Tax” states the proposal “would make Missouri’s already-bad budget situation worse” and the resulting reduction in state revenue “would likely cut state funding to Lindbergh Schools and other school districts throughout the state, thereby harming the quality of education we are able to provide our students.”

Missouri businesses likely would be negatively impacted by the “Everything Tax,” the resolution states.

Besides opposing the “Everything Tax,” the resolution adopted by the school board “urges voters not to sign petitions designed to place it on the ballot.”

The “Everything Tax” would create an estimated revenue shortfall of $3.2 billion to the state budget, Lenz said.