WORTHINGTON — Projections using current interest rates along with the financial stability of Independent School District 518 have combined to mean a savings to district taxpayers of more than $4.6 million over the life of the bonds approved for sale in the November 2019 referendum election. The savings to be had is in relation to the previously projected cost of the approved bonds.
The bonds were approved for sale to fund the construction of a 900-student third-, fourth- and fifth-grade intermediate school that will be constructed on the district-owned Crailsheim site. The approved bonding will also refinance previous lease levy bonds, qualifying the borrowed amount for the Ag2School Minnesota state tax credit.
The savings being passed on to District 518 taxpayers over the course of the bonds is a result of several factors. The first of the determining factors is the interest rate market. The second factor is the financial stability of District 518. By proving to borrowers that District 518 is financially stable, the sale of the bonds was able to take place with an interest rate that is more favorable for ISD 518. Another contributing factor is the plan put in place for the repayment of the bonds. The plan shortens the loan period by five years and takes advantage of the district’s ability to pay a portion of the bonded amount early, saving interest on the borrowed amount.
“As this is a significant amount of money, it is important to save as much as possible for our taxpayers,” ISD 518 School Board Chair Brad Shaffer said. “We are striving to be as efficient as possible with this money.”
“The last of the bonds to fund the new intermediate school and refund the lease levy bonds were sold Jan. 9 at an interest rate of 2.58%, added Linden Olson, ISD 518 School Board treasurer. "The total interest savings from the amount projected at the time of the November referendum is slightly over $4.6 million. The property taxpayers of ISD 518 should be extremely pleased with this result, as am I.”
The next regularly scheduled Independent School District 518 School Board meeting will be at 5:15 p.m. Jan. 21 in the Worthington High School Media Center. All are welcome to attend.
Parker Sandhurst is District 518's communications coordinator.