Bond refinancing to save school district money
The Catasauqua Area School Board is pleased with recent savings attached to the refinancing of an old bond.
The school board unanimously approved the refinancing of a 2007 bond during the Dec. 6 board meeting.
Brad Remig, of Public Financial Management, informed members of the school board the district will save nearly $700,000 by refinancing the bond. Specific savings include $555,000 in capital and $140,000 in general fund savings.
Refinancing the bond, which amounts to $7,525,000, resulted from favorable interest rates, Remig indicated.
"Interest rates kept going down, so we're very fortunate in that regard," he said. "They fell about one percentage point from where they were in March."
CASD Superintendent Robert Spengler told board members favorable interest rates are a positive sign for the school district.
"We are slowly improving, which has allowed us to have a stable rating," Spengler said.
Remig noted the school district does not have to extend the newly issued bond as it is scheduled to be paid off Aug. 2022.
"We're not extending bonds out," Spengler stressed. "It's just plain savings. There are no tricks."
School board Treasurer Don Panto asked Remig what the school district needs to do to increase its credit rating.
Remig told Panto credit rating increases are tied to the district fund balance. Specifically, Remig added, the school district must be in the five- to eight-percentage range of its operating expenses.
"It's tough to get upgraded right now," Remig said.
Panto further inquired how much the school district would have saved if it had a stronger rating fund balance.
According to Remig, the district would have saved $40,000 or a tenth of a percent.
Remig told the board he anticipates closing on the newly refinanced bond Jan. 8.