The Defiance City School District recently completed a Bond refunding of its 2014 issued bonds in the amount of $16,030,000. The bonds were originally issued to construct the new Middle School/High School.
The overall savings was well beyond the district’s initial expectations. Originally, because of historic low interest rates, the refinance was estimated to experience possible Net Present Value savings of 12%, or $2,585,139, to district taxpayers beginning in 2021. However, despite a very volatile market, the District was able to lock in savings at interest rates near historic lows. The 2014 bonds that were refinanced had an average rate of 4.96 percent. The new rate on the 2020 Series Refunding issue is 2.78 percent.
Many school districts target a Net Present Value savings of 2 to 3 percent of the amount to be refinanced. In Defiance’s case, the result was Net Present Value savings of 17.03% or $3,839,490 to district taxpayers beginning in 2021.
Even though this savings cannot be used to run operations of the District, it will reduce the tax burden on the District’s taxpayers. The Board of Education feels this is an important part of its due diligence to the community.
For additional information please contact District CFO/Treasurer Cheryl Swisher at 419-782-9452.