Northmont City Schools to save millions by refinancing

District gets lower interest rate, can pay off debt two years sooner.

Northmont City Schools said this week that the district and its taxpayers will save $5.6 million in the next 30 years, thanks to a just completed bond refinancing.

Via the “advanced refunding” process, Northmont issued new bonds at a lower interest rate than the old bonds first issued to pay for the new Northmont High School and Kleptz Early Learning Center, district treasurer Ann Bernardo said. Entities like school districts, corpo- rations and municipalities can use this option, which is similar to refinancing a mortgage to a shorter term to save money.

“We are happy that we were able to realize a savings for the community,” Superintendent Tony Thomas said in a statement. “... We are working hard to make sure we make good fiscal decisions.”

Bernardo said Northmont was already in the advance refunding process when officials learned that pending federal tax reform would eliminate that option starting in January 2018.

“This tax reform code gave us an added incentive to finish (refinancing) this calendar year,” Bernardo said, pointing to the city of Union as doing the same thing to try to get ahead of the tax code.

Northmont officials cited the district’s strong Aa2 bond rating and favorable timing, as rates had dropped, for the ability to refinance. The bonds would have been paid off in 2049, but now could be paid off two years earlier, Bernardo said. Taxpayers will save $5.6 million over the life of the bond because of the lower rate.