Ronan Schools refinance to save taxpayers money

RONAN — On Wednesday, Aug. 31, Ronan elementary and high school districts successfully completed the refinancings of their outstanding 2001 general obligation bonds to take advantage of low historic interest rates.

The overall gross savings realized by the issuance of the refunding bonds was a total of $895,453 after consideration of the districts’ contributions to the refinancing from the existing debt service funds and costs related to the refinancings. Local taxpayers will experience lower debt service levies for the remaining 10-year term due to the refinancings.

The true interest cost of the new refunding bonds is 2.07 percent, which is 2.74 percent to 3.08 percent lower than the average coupon rate on the outstanding bonds of 4.81 percent to 5.15 percent. The bonds were offered locally to individual and institutional investors through D.A. Davidson & Co. By state law, the districts’ outstanding bonds were first subject to redemption and prepayment after half of the term of the bonds, which occurred on July 1, 2011.

Ronan elementary and high school districts issued the 2001 bonds in the original principal amounts of $6,670,000 and $2,820,000, respectively, or a total of $9,490,000 over 20 years. The refunding bonds are now outstanding in the principal amounts of $3,955,000 and $1,680,000, respectively, or a total of $5,630,000 with a 10-year remaining term.

The 2001 bonds were approved by the districts’ voters on Feb. 6, 2001 for the purpose of constructing the middle school facility including a food service complex, a full-size gymnasium, weight room, wrestling room and band/choir complex and remodeling of the high school lockers.