COVINGTON — Saving taxpayer money was on the agenda for the Covington Board of Education meeting Thursday evening, as they passed resolutions seeking to lower the interest the district will be paying on their bonds for the new school.
“Basically, we are going to begin the process of refunding our bonds and saving the district and the taxpayers a lot of money,” Treasurer Carol Forsythe said. “The interest rates have gone down enough that it’s allowing us to do that.”
Bond refunding is described as retiring an outstanding bond issue by using the proceeds from a new debt issue. The new issue is usually issued at a lower interest rate, which reduces the cost of funding the bond.
The board compared it to refinancing a home mortgage in order to get a better interest rate.
“We’re going to reduce the millage on the bond levy, so that’s how the taxpayers are going to see savings, in the reduction of the millage,” Forsythe said.
The district approved a 3.89-mill levy for the construction of the K-8 school. Savings could potentially reduce the millage by between 0.32 and 0.43 mills.
“We’re refinancing this so the taxpayers’ millage rates will go down and it will save the taxpayers over the course of the bond (payments),” Superintendent Gene Gooding said.
The district is also seeking to get their credit/bond rating upgraded.
“If we get our rating upgraded, it could be more than that,” Forsythe said.
The district could save a total between $1.35 and 1.4 million in interest payments that the district would make on the bonds.
“Carol and I are extremely excited about the opportunity … to be able to lower the millage for our taxpayers. That’s a big deal to us,” Gooding said.
The first bond resolution approved Thursday authorized “the issuance of bonds in the amount of not to exceed $7,885,000 for the purpose of advance refunding a portion of the bonds issued in September 2013 for the purpose of constructing a (pre-kindergarten)-8 school facility and renovating and improving existing facilities.”
The second approved resolution authorized “the issuance of bonds in the amount of not to exceed $900,000 for the purpose of advance refunding a portion of the bonds issued in September 2013 for the purpose of constructing a (pre-kindergarten)-8 school facility and renovating and improving existing facilities.”
“It’s an opportunity to refinance and save some money,” board member Alex Reck said.
Also during the meeting, Doug Lafever of Fanning/Howey Associates presented the board with a check for $53,321 in rebates the district received for the district’s energy-efficient design at the new K-8 school.
“We’re going to spend it wisely,” Gooding said.
Board member Mark Miller asked what the cost of construction was to achieve this energy efficiency. Lafever believed that there was no extra cost for them to design in energy efficiency for the new school.
The district is also moving forward with putting class composite pictures on display in the connecting corridor between the K-8 school and the high school, but a design and cost estimate is not yet available.
Board member Dr. Dean Pond was absent during the meeting.
The board ended their meeting by going into executive session to discuss personnel.
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