Bond Refinancing Saves $1,128,000
The Rocky River City School District recently advanced refunded (refinanced) $7.44 million of outstanding bonds for an interest savings over the life of the new bond issue of over $1,128,000 ($632,000 on a net present value basis through December 1, 2031). The District's Bond Retirement Fund is responsible for paying the debt payments on this issue and is legally separate from the District's general operating fund.
This savings opportunity came about through a combination of a favorable interest rate environment, the retirement of the District's 1998 bond issue for the construction of Rocky River Middle School and the utilization of funds within the District's bond retirement fund to retire principal earlier than scheduled. The $7.44 million that was refinanced was from the District's 2010 bond issue, used for the major capital improvements throughout the District, including the addition of the science wing at Rocky River High School. The District refinanced $28.25 million of this debt issue back in December 2014, saving the taxpayers over $1.1 million on a net present value basis at that time.
Treasure/CFO Greg Markus explained, "The District's administration and board are always looking for ways to reduce costs while maintaining and enhancing programs. This debt refunding is another example of an opportunity that we pursued to save significant dollars for the taxpayers of the District.”
Moody's Investors Service recently reaffirmed the District's Aa2 rating based in large part on the District's solid financial position and strong management and governance.