As a result of good timing, a good bid environment and strategy, Litchfield School District will save taxpayers about $3.371 million in interest on building bond approved by voters last fall.
Superintendent Beckie Simenson and Business Manager Jesse Johnson “did an outstanding job of representing the school during that rating call,” Matthew Hammer, municipal advisor at Ehlers Associates, said during the School Board's meeting Jan. 8. “And S&P (Standard & Poor's) affirmed that rating at a single A, which is a good rating for the district.”
Current building bond estimates project a decrease in tax impact, according to the sale day report provided by Hammer. The estimated annual tax impact for an average home in the district valued at $137,000 dropped from $114 to $106 for 2020, and this number will continue to drop to $82 for 2021, Hammer said.
Johnson said the true interest cost rate is at 2.4474 percent, which will generate $32,877,401 for the district’s construction fund, a 0.74 percent drop from early-November presale estimates.
“Or $259,548 more than originally anticipated,” Johnson added. “In addition, the more favorable interest rate will save our taxpayers $3,370,556 over the life of the bond.”
“Since those pre-election estimates were put in play, the rates have just been coming down and they continue to come down,” Hammer said.
When compared with the pre-election estimates, total principal and interest for the bonds is projected to be approximately $6.9 million lower, according to the same report.
“So outstanding savings per the local taxpayers of Litchfield,” Hammer added. “And it’s about $3.6 million better than what we had during the presale report.”
Hammer said the School District received a large premium on bid early-Wednesday. This allowed for generating additional revenue in the school’s construction fund and maintaining a lower tax impact for the local taxpayers.
“We have really, really, really good results this year,” Hammer said.
The School Board will adopt a resolution to award the sale of $31,490,000 general obligation school building bonds at its Jan. 28 meeting — two days before the closing date of the bonds.