The Sunnyside School Board learned last night during a work session prior to its regular meeting that the district's 2004 bonds could currently be refunded to a lower interest rate, saving the district more than $55,000 a year, and voted to start the process during the board's regular meeting.
A presentation by Annette Sommer of Seattle-Northwest Securities informed the school board that current interest rates are so low the district may be able to effectively refinance from the current 4.32 percent rate down to a rate around 1 percent by selling new bonds that would replace the old bonds. Sommer stated that the old bonds would be "off the books" of the district as soon as the new bonds were sold.
Sommer presented calculations that included the fees for the refunding of the bond and came up with a total savings of more than $275,000 for the remaining life of the bond. The terms of the bond from the district's perspective would not change significantly, and the bond would still come due in 2017.
Because the total process would take up to two months, the board decided to include a last-minute motion to start action on the refunding in their regular session. The motion passed, which allows the district to submit an application to the State School Bond Guarantee Program that would give any new bonds issued by the district a high rating.
The board will decide what the savings goal of the refunding will be at its next regular session and delegate the authority to sell the new bonds.
The bonds the district sold in 2009 are not eligible to be refunded, according to Sommer, because they are too new.
Sommer told the school board that "time is of the essence now," because interest rates are so low.
Director Sandra Linde noted that she'd just refinanced her house due to the current low rates and compared refunding the bonds to that action.