Bond refunding could save taxpayers $100,000 more than original estimate


Executive Editor

Refunding general obligation bonds issued by Lindbergh Schools in 2003 could save district taxpayers $100,000 more than originally estimated, according to Chief Financial Officer Pat Lanane.

A resolution authorizing the sale of more than $9 million in general obligation bonds to refund the 2003 bonds was unanimously approved Jan. 10 by the Board of Education.

As originally proposed, the sale of the bonds, scheduled for Feb. 14, was expected to save taxpayers $500,000. That savings now is estimated at $600,000, Lanane told board members.

“… I can tell you that the current savings look wonderful … We’ll know this time next month exactly what is going on …,” he said.

At the recommendation of the district’s independent financial adviser, WM Financial Strategies, the Board of Education voted in early November to begin the process of advance refunding the 2003 bonds.

As proposed, Lindbergh will sell $9.07 million in general obligation bonds to refund 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.

Taxpayers will directly benefit from the refunding, according to Lanane, because they will pay $600,000 less in taxes to the school district in the future. The district itself reaps no benefit from the refunding, according to the chief financial officer.

If the refunding nets the estimated savings of $600,000, the district will have saved taxpayers nearly $4.5 million since 1998 by taking advantage of lower interest rates and refinancing bonds.

By refinancing bonds in 1998, 2001, 2004, 2008 and 2010, the district has saved taxpayers a total of $3,872,915. With the latest refunding, that savings is projected to increase to $4,472,915.