In an effort to save money over the long term, the Belle Valley School Board has agreed to purchase back bonds with funds leftover from the construction of its new Belle Valley School building.
Superintendent Louis Obernuefemann credited district bookkeeper Joan McKay with coming up with the idea to buy back the bonds as they become available.
"We think it's only right to the taxpayers," McKay said. "They approved the selling of these bonds. If we buy them back, we are saving a lot of interest that will not occur then on their tax bills in years to come."
Over the last year, the district has purchased nearly $1.25 million in bonds, which will save the district $411,000 in interest, according to McKay.
"By buying back early, we will not be paying that principal and we will be saving a lot of interest," she said. "We feel that's the right thing to do."
She explained the district is buying back Capital Appreciation Bonds using the district's Capital Project Fund, which has approximately $8 million in it.
The district secured $39.45 million in bonds and $4.29 million from the Capital Development Board for a total of $43.7 million for the new building on Amann Drive, according to McKay. The district ended up spending $9 million less than that on the building, which had a total cost of $34.75 million.
"When we got the bonds, we told the voters we would do everything to keep costs down," School Board President Karen Kunz said. "You can't just refund the money. It's not set up that way. The best thing we can do with the money left over is to buy back these bonds to keep the interest down."
Belle Valley students moved into the new building in January 2012. McKay said the district purchased its first bonds back in April of last year and this spring purchased two more series of bonds.
The school board recently approved an annual resolution to continue to purchase back Capital Appreciation Bonds. The resolution is valid for one year through April 30, 2014.
The district is not required to pay the Capital Appreciation Bonds back until 2019, McKay said. However, the district has started to pay back the Build America Bonds it purchased.
In the future, McKay said the district will likely need to refinance the Capital Appreciation Bonds as a result of the bond buy backs.
"I realize taxpayers are not seeing their tax bills go down this year," she said, "but if we can keep those tax bills at least not rising for future years that's what our goal is."
"We are trying to do what we think is the best thing for all the taxpayers in the district," Kunz said.
Contact reporter Jamie Forsythe at 239-2562 or email@example.com.