W. Aurora school district to lower debt

Looking to save more than $2.5 million, West Aurora School District 129 will refinance some of its debts next month.

The savings will come from refinancing up to $28 million on several bonds at much lower interest rates than the district has now, said Assistant Superintendent for Finance Vickie Nissen. The move would take advantage of a financial marketplace that is much more favorable to the district than when the bonds were issued.

Interest rates on the bonds range from 4.8 percent to 5.5 percent now, and with the refinance, they will drop to 3.25 percent to 4 percent. The $2.7 million in savings will be spread over the next eight years, she said.

Nissen said the move is similar to a homeowner refinancing at a lower rate and made sense for the district.

"This is a promises-made, promises-kept philosophy when it comes to being good stewards of the taxpayers' money," Board of Education Vice President Allyson Herget said.

Last week the board of education also approved tax anticipation warrants, or loans for a short term cash flow needs. The warrants -- totaling $17.4 million -- are scheduled to be paid back this year after the district collects its tax levy.

Nissen said the district collects about 49 percent of its tax money in May and June. Although the money is on the way, without that money on hand, the district's "coffers are a little low," she said.

The district anticipates making the same move next year. However, Nissen said the 2009 warrants may be the last for a while because the district will start seeing more operation revenue from a successful tax rate increase passed last year.