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School saves taxpayers $500,000 by refinancing bonds

On Tuesday, September 10, 2019, Cedar Springs Public Schools successfully refinanced its School Loan Revolving Fund (SLRF) Balance, and saved the taxpayers over $500,000 in interest payments.

The District received its “AA” rating on the Michigan School Loan Qualification Program and an “A+” underlying district rating from Standard and Poor’s. The underlying rating reflects the District’s stable economy and a strong market value per capita, coupled with access to the greater Grand Rapids area. Steady enrollment projections, two consecutive audited general fund surpluses and moderate debt with above-average amortization were also contributing factors.

The day of pricing saw stable market conditions. The bonds, which have a final maturity of November 1, 2026, attracted interest from multiple investors, which is a strong indication that the Board and Administration are responsibly managing the District’s finances. The Board of Education recognized the opportunity to save taxpayer dollars and took advantage of a great bond climate for issuers.  

“Many other districts throughout the state are now following our lead and taking advantage of the great rate climate and are refunding their SLRF balances,” explained Cedar Springs Schools Superintendent Scott Smith. “Our goal is to be good stewards of the dollars provided to us by local taxes. The community and School District should be very pleased with the results of the bond sale.”

The federally taxable 2019 bonds were refunded in the amount of $6,100,000 at a lower interest rate for seven years. 

“The School District was able to save over $504,000 in interest payments for our taxpayers with a new true interest rate of 2.18 percent. The SBLF current variable rate is 3.40 percent and has a minimum 3.00 percent interest rate for the fund. The difference between the SBLF rate and the new fixed true interest rate of 2.18% is the recognized savings,” explained Smith.

Smith added that as the District faces an upcoming bond proposal, it is important to note that Cedar Springs Public Schools is an attractive place for investors. “Responsible financial stewardship will serve Cedar Springs Public Schools well as it looks to enhance the facilities used by our students and community.”

If you have any questions related to the 2019 refunding, please contact Scott Smith, Superintendent, at 616-696-1204 ext. 1004 or via email at scott.smith@csredhawks.org.   

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