At their November 26 meeting, the current school board authorized the sale of General Obligation Refunding Bonds. In effect, the school district is able to refinance its debt, resulting in significantly lower interest payments (one of the bond issues carries a 0.6% interest rate) as well as reduced principal (due to a premium paid by the purchaser of the bonds). The result is more than $2 million in savings to taxpayers over the next eleven years. This is well explained by Superintendent Richardson in his weekly video on Northfield Patch.
The Northfield News published a misleading editorial after the school board’s vote. The News writes:
Now, the goal of the board should be to ensure that the primary beneficiaries of the savings are the taxpayers.
Such savings no doubt presents a temptation to expand qualifying programming or staffing or curricula, especially since the savings doesn’t come all at once but rather in $100,000 or so spurts over the next 13 years. That would be easy, so easy to redirect to another, qualified use.
We urge the board to resist and pass the savings directly to district residents instead through a lower or at least flat levy going forward. The district’s voters have consistently supported Northfield Public Schools in the past. It’s the perfect time to pay back the community a little bit.
There is no temptation here to resist. As Superintendent Richardson explains about the savings from the bond refunding: “This is not money that really adds dollars to the school district. It doesn’t really give us additional resources. But what it does do for taxpayers is that it significantly reduces the tax load on property.”
In other words, the savings will be passed on directly to taxpayers. The refinancing does not bring in additional revenue for the district; rather, it reduces the amount that taxpayers will have to contribute in property taxes to pay off existing debt.