Late last month Columbia Public Schools restructured its deb. They are projected to save over $7 million in interest costs. If they were to not refinance, these fees would have slowly built up over time as a result of Columbia Public School’s $35 million bond debt.
While the savings may seem fairly large, you may not see any change in your lifetime.
“We won’t actually realize the savings until the end of the bond period,” said Michelle Baumstark, Columbia Public School’s community relations director “which is quite a number of years from now.”
Restructuring the School’s debt is a lot like refinancing your home mortgage. When you refinance your mortgage you take your mortgage, go to the bank, and get a better interest rate. Essentially that is what Columbia Public Schools did with their debt. In time, the schools will see their savings but not any time soon.
However, Anna Munson, chief financial officer at Columbia Public Schools argues that anytime they can save money in interest that it benefits the tax payers. Because while you may not be seeing benefits in the near future, the school district says it is doing its best to keep tax levies low. Columbia Public schools has committed to not increasing the tax levies for the debt for as long as they are able.
“For as long as we possibly can, we want to keep that tax levy for debt at approximately 97 cents rent” said Anna Munson.
By doing this, they are further increasing their savings. Munson believes this is a great benefit to the students because more money will go to the schools.
“It benefits the students because we have more money to spend on them, not on interest payments” said Munson “just like your personal budget, if you reduce the payments on your home, you have more expendable cash each month.”
When it comes to refinancing, Michelle Baumstark said that Columbia Public Schools are always looking for a good deal and intend to continually try to refinance their debt in order to be on top of their debt.
“We are continuing to monitor the finances of the school district, to be good stewards of the tax payer dollars, and to make sure that we are being efficient with the use of our funds” said Baumstark