Bond Refinancing Saves Taxpayers Money
Bond Refinancing Saves Taxpayers Money
Posted on 04/20/2022
The Puyallup School District has successfully taken advantage of current low bond interest rates to save taxpayers almost $500,000 over the next two years. A sale of bonds authorized by the District Board of Directors will refinance bonds issued in 2012. The overall borrowing rate for the new bonds sold on February 23 is a very low 2.47%, compared to the rate of 4.73% on the old bonds.
“This is a great opportunity to save our taxpayers a significant amount of money,” said Superintendent Dr. John Polm. He emphasized that the anticipated savings will go directly to taxpayers through lower future tax collections. “This is money that will now stay in our community and our local economy, rather than go to pay higher interest on those bonds
Although there has been substantial volatility in the bond market resulting in increasing interest rates over the past month, the interest rates on these types of bonds are still relatively low compared to historical rates, according to Laura Marcoe, the District’s Assistant Superintendent of Business & Support Services. “We have been monitoring the market closely, hoping to have an opportunity to refinance these bonds; we are very happy to be able to lock-in these savings to the District taxpayers in a time of rising rates,” said Marcoe. “This was our earliest opportunity to refinance these bonds. We may have another opportunity later this year to refinance another issue if rates do not continue to climb. We are hoping to provide some additional savings, but we’ll have to wait and see what happens in the market,” notes Marcoe.
As part of the sale, the District received a very strong credit rating of “Aa2” from Moody’s Investors Service, which helps lower the District’s borrowing costs.
“This refinancing is one more way to demonstrate to our community our commitment to fiscal stewardship of the funds entrusted to us,” said Superintendent Polm.