USC may save another $1 million from bond refinancingPublished Feb 12, 2013 at 10:40 am (Updated Feb 12, 2013 at 10:40 am)
After saving about $3.5 million in net present value – or today’s dollars – last fall in a bond refinancing, Upper St. Clair School Board voted unanimously Feb. 11 to authorize paperwork toward another bond refinancing that could save them almost another $1 million.
If it authorizes the refinancing, the school board will have to decide whether to take most of that savings up front – at closing – or whether to spread it out in the form of debt service reduction over the life of the bonds, through 2031.
The school board voted unanimously Feb. 11 to proceed with paperwork to refinance about $10 million in bonds that the district sold in 2007.
Michael Bova of Boenning & Scattergood told the school district Feb. 11 that he expected to be able to refinance the bonds at interest rates between 0.6 and 3.25 percent. The district is currently paying between 3.625 and 4.25 percent interest on the bonds that were issued in 2007.
Bova told the board that all of the savings realized from the refinancing must be spent on capital projects within the next three years.
Frosina Cordisco, director of business and finance for the district, said this is a way to put money into a capital reserve fund for needed projects.
Patrick O’Toole, district superintendent, said they have not been placing money into a capital fund due to budget pressures the last few years.
He told the board that the administration just learned of the refinancing opportunity last week. He said they know they have some capital projects for the next three years, but they need a little more time to prioritize them to present to the board.
The school board may vote to authorize the refinancing of the bonds as early as the Feb. 25 meeting.