Lindbergh Schools next week plans to sell more than $9 million in general obligation bonds to refund bonds issued in 2003.
The sale planned for Feb. 14 — Valentine’s Day — actually is a sweetheart of a deal for district taxpayers who will directly benefit from the refunding.
Through the refunding, Lindbergh taxpayers will pay $600,000 less in taxes to the school district in the future, according to Chief Financial Officer Pat Lanane. The school district itself reaps no benefit from the re-funding, according to Lanane.
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. Lindbergh plans to 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 will be used to purchase U.S. government securities, which will be deposited in an escrow account.
The principal and interest earned on the government securities will be sufficient to retire all the debt associated with the 2003 bonds when they are callable, according to Lanane.
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.
That’s an astonishing amount of savings for taxpayers, but hardly surprising given the fact that fiscal stewardship has been a hallmark of administrators and board members.
In fact, from the 1994-1995 school year through the 2000-2001 school year, the school board maintained the operating tax rate at $2.42, rolling back 36 cents each year and leaving $25 million in taxes uncollected. The board continued to roll back the operating tax rate in smaller amounts from 2001-2002 through 2004-2005, saving taxpayers an additional $6 million, bringing the total of uncollected taxes to more than $30 million.
With next week’s refunding sale, Lindbergh proves it continues to adhere to its longstanding policy of taking only what’s needed and reducing the burden on taxpayers when it can.