Kuna school district saves $900,000 with bond refinance

The Kuna school district will save about $900,000 over the next 10 years after refinancing about $8 million in bonds.
School board members on Feb. 1 unanimously agreed to issue new bonds to replace parts of the district’s 2004 bond issue that was used to build Reed and Crimson Point elementary schools.
The school district is taking advantage of historically low interest rates, similar to a homeowner refinancing a mortgage.
Eric Heringer, senior vice president of Seattle Northwest, briefed board members on the details of the bond sale.
The average interest rate on the bonds that the district refinanced is 4.81 percent. The district was able to secure a new interest rate of 1.46 percent. Heringer said municipal bond rates have been this low only .11 percent of the time over the past 20 years — meaning rates have been lower than current rates only eight days out of the past 20 years.
Bond payments on these bonds will go from $1.33 million this year down to $1.27 million. Over the 10-year life of the bonds, total payments will drop from $14.657 million to $13.711 million, a saving of $945,955, which translates to $877,741 in present value dollars.