District 204 refinances, saves $2 million
Taxpayers in Indian Prairie District 204 will save about $2 million during the next six years because of the refinancing of about $21 million in debt.
Loans taken out in 2003 carried interest rates of between 4 and 5 percent, Assistant Superintendent Dave Holm said. Those loans can be refinanced at rates between .5 percent to 1.7 percent.
“That is pretty amazing,” said Steve Larson of Ehlers, a financial advisory company that handled the bond sale. “These are the lowest rates I’ve ever seen in 30 years of being in the bond business.”
District 204’s AA1 bond rating from Moody’s Investors Services also helped the district receive a good rate, Larson said.
Because the district has refinanced its debt over the years, partly to keep costs down for taxpayers and also to push payments into the future so that new homeowners share the burden of paying for schools like the recently built Metea Valley High School, property taxes related to the debt have gone down, Holm said.
For instance, the owner of an average home in District 204, assessed at $300,000 in 2004 and valued at $325,000 today, would have paid $720 in taxes related to the district’s debt in 2004 and about $600 this year. With Monday’s debt refinancing, that amount will be further reduced next year by about $9, Holm said.
“This is only a value to the taxpayers,” he said, adding the district gets no financial benefit when it refinances debt.
District 204 was able to refinance the debt because of a call option, allowing it to pay off the $21 million portion this year, Holm said. Overall, the district has $310 million in debt, largely from building schools, which is expected to be paid off by 2025.
District officials will continue to look at refinancing debt in the future if interest rates remain low as other call options come due. It will be a few years before there is another refinancing opportunity, Holm said.
While the refinancing was approved Monday night with a board majority, Dawn DeSart voted against the refinancing and Christine Vickers abstained from the vote. DeSart said she wants the district to pay off its debt sooner and Vickers said she didn’t have enough time to review the information, which was given to board members Monday afternoon.