Reduced interest rate saves district taxpayers $6 million
MENOMONEE FALLS (6/14/16) — The School District of Menomonee Falls timed the sale of $30.7 million in facility maintenance bonds to a day with some of the lowest interest rates ever which is resulting in more than $6 million in savings.
The bonds are part of a community-approved referendum from April that covers facilities updates at all of the district’s buildings as well as the demolition of Thomas Jefferson and Hiawatha.
“We knew rates had stayed lower than what was expected at the time of the referendum so we moved quickly to take the bonds to market,” said Keith Brightman, Director of Finance & Operations. “We expected with our timing that rates would continue to be low but were extremely pleased that we hit a sale date with historically low rates. Even with the low rates, there was strong bidding from both regional and national banks and broker dealer firms. We decided early on to take the bonds to market using a competitive sale strategy where the banks bid against each other which helps to drive down the district’s borrowing costs.”
The bonds were sold with an average all-in interest rate of 2.78 percent — well under the pre-referendum estimate of 4 percent and the early May post-referendum estimate of 3.12 percent. The actual interest cost savings is $6 million less than what it would have been if the rates had been at 4 percent. These savings are direct taxpayer savings which will reduce the debt service levies below the estimated 21 cents per $1,000 of home value estimated as a tax impact during the referendum.
“We are so appreciative of the community for their support for the facilities referendum and we want our taxpayers to know that we’re doing our utmost to be responsible stewards of our tax payers’ dollar,” said Dr. Pat Greco, superintendent for the school district of Menomonee Falls.