School seeks interest savings

FAIRMONT – Fairmont Area Schools hopes to save taxpayers $25,000 per year by refinancing its 2005 bonds.

The school board on Tuesday approved moving forward with the sale of $2.7 million in general obligation school building refunding bonds.

According to Patty Heminover of Springsted Incorporated, the district’s financial adviser, it is taxpayers who will save, up to $125,000 over the course of the loans.

District business manager Sue Nelson said the process is similar to home refinancing, in which the district will go out “for bids” in front of underwriters and banks, with the district to choose who has the best price.

The sale date is set for Nov. 12.

Heminover said interest rates could go up before the sale date, which could affect the district’s savings.

The federal government shutdown also has the potential to increase rates to a level that would make a sale unwise. Heminover said the district has the option to cancel the sale up until a certain date. After that date, if the interest rate surges, the district has the option of rejecting all bids and having a resale within six months.

Heminover said four other districts she works with have postponed their refinancing plans because of interest fluctuations, with three already setting a resale date.

This is the second time the district has refinanced this set of bonds. They were originally sold in 1999 for rehabilitation at the old middle school and then refinanced in 2005.