January 30, 2013

Second school bond refinance package brings savings to $1.7 million

For the second time this year, Oak Harbor School District is refinancing a major portion of the bonds used to rebuild Oak Harbor High School, resulting in a total of $1.76 million in savings.

"This is money returned directly to the taxpayer," Superintendent Rick Schulte told the Oak Harbor School Board Monday. "The savings don't come back to the schools. It's tax money that will never have to be collected in the first place."

The latest refinance involves $23 million in bonds resold at the historically-low interest rate of 1.6 percent. The move saves $1.16 million in the 10 years remaining to pay off the high school bonds.

Among the buyers was Whidbey Island Bank, which purchased $1 million in bonds. The bank also purchased $3.4 million in bonds from the first refinancing.

In summer of 2012, the school district refinanced $9 million in bonds, saving about $600,000 in interest payments over the life of the loan.

The district's solid "Aa3" bond rating by Moody's Investors Service,also contributed to the success of the sale, said David Trageser, senior vice president of D.A. Davidson and Company. Moody's cited the district's manageable debt levels, beneficial voter support, and the school board's fund balance policy as credit factors supporting the rating, he said.

The refinancing package is expected to be finalized in late February.