WCSD seeks to capitalize on Federal interest rates
Warren County School District is looking to take advantage of historically low interest rates.
During a consultation with PFM Managing Director Jamie Doyle, the board and the finance committee heard that refunding almost $10 million in bond debt may save $100,000 or more.
Doyle said the district is earning more on its short-term investments and can, through refinancing, pay less on long-term borrowing.
The interest on the district’s 2013 general obligation bond series is “pretty low… already,” she said. “At today’s interest rate” the district would save just shy of $106,000 by refinancing. “Interest rates have done nothing but go lower since November of 2018.”
Doyle suggested the board approve a minimum savings of $50,000.
Taking action at the Oct. 7 meeting would enable PFM to lock in a rate as early as Oct. 9.
The amount of savings would change dramatically with even a very slight change in the interest rate, she said. “The present value of one-tenth of one percent… is $87,272.11.”
“Interest rates go up one tenth of one percent… it doesn’t work,” Doyle said. “If they go down one tenth of one percent, you save an additional $87,000.”
The odds of rates going down are good. “The prediction is that there’s an 88 percent chance (the Federal Reserve) will lower them again at their September meeting,” she said.
The proposed refinancing would not extend the period of the bond, Doyle said, and all of the savings would be realized right away.
Active shooter drill
Superintendent Amy Stewart updated board members on last week’s all-county active shooter drill.
“We had an enormous turnout of law enforcement, fire, and EMS, from Pennsylvania and New York,” she said. “We did two full drills. We’ll do a formal sit-down with notes so that we are growing.”
“It was a true community effort,” Stewart said. The district and the responders are each learning “how they would come out and help us in the event that we would need them.”