RF School Board: New deal equals taxpayer savings
The school board Monday passed a resolution to refinance just under $9 million in general obligation bonds for a much lower interest rate. The expected savings will go directly to school district taxpayers.
The 1999 bonds relate to borrowing needed to build the high school.
Finance Director Chad Smurawa said the debt's current interest rate is 5.5%. The new rate will come during bidding next month. Smurawa expects it to be 2.8-2.85%.
"Just like when a person refinances a house, this is a chance for the school district to bring down some of its bond costs," he said.
Taxpayer savings, amounting to a shade over $1.2 million, will be spread out over a decade but concentrated from 2012 to 2016.
Smurawa said the refinancing is set for next month when the generable obligation bonds have a one-time "callable" option. That means they can be redeemed by the borrower and then bid out, hopefully at a more favorable interest rate.
Superintendent Tom Westerhaus said the refinanced bonds, while a "great savings" for taxpayers, won't solve the district's financial woes.
Board member Manny Kenney agreed, saying: "(The refinancing) doesn't free up money to solve our operating costs."
A six-figure 2010-11 budget reduction package is still expected to come before the school board in early spring.
Monday night the school board also:
The contract's first year has a 3.11% increase with wages frozen and all extra money going toward health/dental benefits.
The second year calls for a 2% hike, with a 1% pay increase and another 1% merit-pay increase as decided by the superintendent and depending on the district's financial status.
The contract set yearly pay for Chad Smurawa, facilities and finances director; Rick Osterhaus, academic services director; and Donna Hill, personnel director.
All three will be at $104,299 (2009-10) and at $105,362 (2010-11). Jackie Steinhoff, student services director, will be at $89,941 and $90,957 for 2010-11.
Board member Stacy Johnson-Myers said both sides showed restraint to shape a contract that reflected the district's tight budget.
Serene and Coughlin join the list of these high school master teachers: Joe Paatalo, Sue Popelka, Lisa Showers and Carrie Loney.