District News

Bond refunding saves taxpayer dollars

Posted on: May 16, 2016

Little Miami will save several million dollars of taxpayer money when it refinances two bonds, the district treasurer said.

Treasurer Terry Gonda told the Little Miami Board of Education at its last board meeting that thanks to the upcoming refinancing of rates on two general obligation bonds, the district will save taxpayers a projected $4.2 million over the life of the debt.

“This will be a direct savings to taxpayers,” Gonda said. “Similar to refinancing the rate on a personal loan, we wanted to take advantage of lower interest rates and refinance these bonds.”

When districts have large projects that they are not able to pay for in one lump sum, they use a bond to finance the project and pay on that debt for many years. 

Gonda said the district will refinance – or “refund” as it is termed – two bonds, one for $5.1 million that originated in 2011 and one for $39.6 million that originated in 2007. Both of these bonds originally were for the purpose of new construction, improvements, renovations and additions to facilities, acquisition of real property, providing equipment, furnishings, transportation, and technology and site improvements. This “refunding” will save approximately $1.1 million in payments over the life of the first bond and approximately $3.1 million over the life of the second.

“These savings represent payments that the district and, in turn, the taxpayers, will not be obligated to make,” Gonda said. “We take our stewardship of tax dollars very seriously and are pleased that we will be able to realize these savings.”