SWL to refinance bonds and offer retirement deals
Southwest Licking school board members approved measures they said would save taxpayers more than half a million dollars.
On May 16, they voted 4-0, with Vice President Cindy Zaino absent, to refinance several bonds and to offer retirement incentives to classified staff members.
"This is very similar to refinancing your house," said Treasurer Richard Jones. "We sell new bonds at a lower interest rate and use those bonds to pay off these, basically saving the taxpayers money."
The bonds total roughly $19 million and were used to make improvements to district buildings, including Etna Elementary School in 2003. The bonds also covered some energy-conservation initiatives.
Jones said the refinancing would save taxpayers roughly $500,000 over the life of the bonds.
"That money doesn't come back to us," he said. "It goes directly to the taxpayers. Hopefully, we can reduce the millage rate on what we collect on these bond issues to get the money back to them. It's a win-win."
Jones said the district did a similar refinancing "a few years back," which saved money, and the interest rates have continued to drop.
Jones wasn't as certain how much money offering classified staff members an early retirement incentive would save Southwest Licking, but he recommended the board approve it just the same.
He said the incentives would be similar to what the district offered to its teachers to opt for early retirement.
Director of Financial Operations Mindy Sturm said the retirement plan needs to have at least two people retire for it to be effective.
If two retire, each retiree would receive an additional $1,000 if they work 12 months per year. Retiring employees who work nine months per year would receive an additional $750.
The incentive would apply only to classified employees who have not previously retired from the School Employees Retirement System and the payout would increase significantly at four ($2,500 and $1,875) and six ($6,000 and $4,500) retiring employees, respectively.
"If everybody who is eligible to retire could, there would be a substantial savings," Jones said.
He said it's hard to predict what the savings would be, but even if two of the estimated 35 classified staff members eligible to retire would do so, the district would see a savings.
Jones said if six to eight would retire, the district could save around $100,000 over the next five years.
"I believe we can get two to four (people retiring), hopefully six," Jones said. "I feel in the worst-case scenario, we're still saving money."