MONROE - The Monroe school district could save $800,000 over the next eight years if it refinances its almost $11.5 million debt by issuing bonds.
The debt is a result of 2001 borrowing which helped pay for school construction costs, said district business manager Ron Olson.
Olson said the cost to refinance hasn't been determined and wouldn't be until the district makes a final decision Oct. 25. However, Olson said the $800,000 savings to the district includes the estimated cost to the district to refinance.
The school board heard a presentation about refinancing the debt from Lisa Voisin of Robert W. Baird and Company of Milwaukee Monday.
When the school board makes its final decision about refinancing the debt, it could authorize Baird to issue the bonds whenever the district could receive the best interest rate. Voisin said the district would then be locked in at the interest rate.
Voisin said the district could reduce its interest rate from the approximately 4.8 percent it currently pays to between 2.5 and 3 percent over the next eight years. That would save the district about $100,000 every year for the next eight years, she said.
If the district refinances, it will pay about $11.8 million in principal and interest over the next eight years. Interest payments on the bonds would begin at about $260,000 next year with the payments gradually decreasing to about $32,000 by the 2018-19 school year.
If the district doesn't refinance the debt, it will pay about $12.6 million over the next eight years to pay off the debt. The district will pay about $486,000 in interest next year, with interest declining to $54,500 in the 2018-19 school year.
She said the district's A+ bond rating allows the district to get a better interest rate. "The rating is due to the great fiscal management," she said.
The new bonds would be issued April 1, Voisin said.
Last year, the district refinanced about $1.28 million in general obligation bonds. The $1.28 million was refinanced to avoid a large balloon payment this year, Olson said.
Olson said the district has a debt of about $16 million. The majority of the debt is the $11.5 million. The district doesn't plan to refinance the rest of the debt, he said.
The debt is a result of 2001 borrowing which helped pay for school construction costs, said district business manager Ron Olson.
Olson said the cost to refinance hasn't been determined and wouldn't be until the district makes a final decision Oct. 25. However, Olson said the $800,000 savings to the district includes the estimated cost to the district to refinance.
The school board heard a presentation about refinancing the debt from Lisa Voisin of Robert W. Baird and Company of Milwaukee Monday.
When the school board makes its final decision about refinancing the debt, it could authorize Baird to issue the bonds whenever the district could receive the best interest rate. Voisin said the district would then be locked in at the interest rate.
Voisin said the district could reduce its interest rate from the approximately 4.8 percent it currently pays to between 2.5 and 3 percent over the next eight years. That would save the district about $100,000 every year for the next eight years, she said.
If the district refinances, it will pay about $11.8 million in principal and interest over the next eight years. Interest payments on the bonds would begin at about $260,000 next year with the payments gradually decreasing to about $32,000 by the 2018-19 school year.
If the district doesn't refinance the debt, it will pay about $12.6 million over the next eight years to pay off the debt. The district will pay about $486,000 in interest next year, with interest declining to $54,500 in the 2018-19 school year.
She said the district's A+ bond rating allows the district to get a better interest rate. "The rating is due to the great fiscal management," she said.
The new bonds would be issued April 1, Voisin said.
Last year, the district refinanced about $1.28 million in general obligation bonds. The $1.28 million was refinanced to avoid a large balloon payment this year, Olson said.
Olson said the district has a debt of about $16 million. The majority of the debt is the $11.5 million. The district doesn't plan to refinance the rest of the debt, he said.