LIMA — Refinancing debt for the recently completed Apollo Career Center construction project is saving the school district roughly $3.5 million.
“We actually had a visit from one of our former colleagues from Rockmill Financial, who is now with PNC Banking, and she’s good friends with our treasurer here. She called and started a conversation, and in the course of the conversation she said, ‘I think you could really save some nice interest savings for the taxpayers,’ so that kind of got the ball rolling,” said Judy Wells, Apollo Career Center superintendent.
According to a news release, Wells and treasurer Maria Rellinger worked with finance experts to arrange a one-time tax exempt advance refunding opportunity before the end of the calendar year. The federal tax law overhaul, predicted to offer historic changes to the tax code to strengthen the U.S. economy, eliminated advance refunding of municipal bonds by tax exempt insurers such as public schools.
It was in May 2013 when voters passed a 1 mill tax levy, which generated $30 million for the construction and renovation of the Apollo campus.
The first sale of the bonds to finance the project were at 4.68 percent, which is higher than current historic lows, so the Apollo Board of Education passed a resolution in late November to sell $29,105,00 in general obligation refunding bonds.
The move resulted in an interest rate of 3.42 percent.
“Advance refunding of our bonds can only occur once in the first 10 years of issuing the debt, therefore timing is crucial,” Rellinger said. “We feel we have pinpointed the maximum savings and have capitalized on this opportunity to give back to the taxpayers. We are grateful to be able to save taxpayers money, which goes straight back to those who support this great school.”
What this means to the taxpayers is the interest savings of $3,521,484.53, allowing the 30-year tax collection to be reduced by 2.87 years.
“Our taxpayers will essentially be spending less for the expansion of this beautiful and modern Apollo campus,” Wells said. “The treasurer and I were very motivated to make this happen on behalf of the community before the changes in the tax laws prevented us from doing so. It’s our way of giving back to the voters in our four-county region and thanking them for their strong and positive support.”
Reach Sam Shriver at 567-242-0409.