Magazine schools refinance bond
The Magazine School District is refinancing a bond with the hopes of getting a lower percentage rate of 1.36% on its interest.
Superintendent Beth Shumate compared the move to refinancing a mortgage on a house.
“The percentage of the amount of money that you owe the bank would be less," Shumate said.
The original percentage rate on the district's bond is 2.77%.
Municipalities take out bonds as a kind of loan for large projects, said Ray Beardsley with First Security Finance.
Investors buy the bond and provide the municipality with money for the project. The municipality then pays back the investors with interest, Beardsley said.
“For sure this is about being good stewards of our money," Shumate said.
Refinancing the bond will save the district about $47,953 over the lifetime of the bond. It will save the district $23,980 during the firs.
The Magazine schools' bond lasts until 2033 and was originally sold in 2012, Shumate said. The bond provided the district with $990,000.
The bond was used for construction. Specifically, it was used for renovating and equipping the junior. and senior high cafeteria, erecting and equipping a new elementary physical education building, installing a surveillance and security system at the junior and senior high school and elementary school, adding fire alarms and smoke detectors at both schools, replacing and upgrading interior and exterior windows at both schools, upgrading the electrical system at junior and senior high school, replacing the roof at the junior and senior high school and constructing a newly paved parking lot at the junior and senior high school.
The district wanted to refinance the bond now because while nationally the percentage rates are low at this time, they are starting to increase.
“They’re starting to creep up that's why we wanted to do this now," Shumate said.
The district will have a special school board meeting May 3 to sign the final documents for the refinancing of the bond. It will officially go through at 11 a.m. April 22.