Refinancing a Licking Heights bond debt could save the school district $900,000 to $1 million, which is beneficial for the district and taxpayers, said Treasurer Jennifer Vanover.
School board members voted 5-0 at their Oct. 24 board meeting to authorize Vanover to investigate refinancing about $15.8 million, which is the remainder of the $24 million bond debt to build the high school.
"It's the same opportunity as refinancing your house," she said. "It's using the same logic."
Vanover said she's not quite sure what kind of an interest rate she could secure, because like a home loan, the rates can vary. However, she said, based on a previous refinancing of roughly $16 million used toward construction of West and South elementary schools and various renovations from 5 percent to less than 3 percent, which saved the district about $1 million, she believes she may be able to do roughly the same with the $15.8 million high school debt.
"I don't really know what the rate will be," said Vanover, adding she'll have check with Moody's Investors Service, which calculates the district's bond credit rating based upon several factors, such as finances and academic ratings.
Vanover said Licking Heights' current Moody's rating is Aa2, which is a high-quality long- and short-term loan rating and reflects a very low credit risk. It is the third-highest rating issued by Moody's.
Vanover emphasized that should the district successfully refinance the $15.8 million debt, the money saved is not a tangible amount that can be spent toward anything in the district. Simply put, it's less money district residents have to pay Licking Heights through existing taxes and the savings would accrue over several years.
"It's a million we won't have to collect from the taxpayers," she said.
Vanover said any refinancing would not extend the existing terms of the bond. It would not take longer to pay it off.
"That wouldn't make much sense," she said.