Schools
School Board Secures $3.7 Million in Future Savings
By voting to refund the 2002 Certificates of Participation early, the Mehlville School Board secured a 2.87 percent interest rate, saving approximately $3.7 million.
By locking in interest rates for the district's Certificates of Participation (COPs), the will save $3.7 million in future years. The board voted at its Thursday meeting to approve refinancing the 2002 COPs.
The decision to pass the resolution was partly based on the potential risk of an increase in interest rates due to an uncertain economy.
Under the resolution, $1.2 million will be saved on interest rates this year, with the rest of the savings coming into play next year.
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“We elected to refund (the Certificates of Participation) early to lock in the savings in case interest rates change dramatically due to all the uncertainty out there,” said Chief Financial Officer Noel Knobloch.
According to Knobloch, by issuing the refunds before Sept. 15 of this year, the district locks in an interest rate of 2.87 percent, securing 88 percent of potential savings.
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The district's previous interest rate was set at 5 percent.
The full refund will be completed by 2012 and will consist of two stages. The first stage offers a partial refund this September and the second refund will take place before September 2012.
