Lower school bond rates may save taxpayers money

Kalispell Public Schools may lock in a lower interest rate than expected as they prepare to sell $3.35 million in bonds for classroom construction.

This is good news for elementary school district taxpayers who can expect to pay less than initially estimated during the September mail-ballot election. 

If a current 1.64 percent interest rate is locked in by the bond sale set for Jan. 17, 2013, owners of a home valued at $100,000 can expect annual property taxes to increase by $9.13. On a home valued at $200,000, the tax increase would be $18.25. 

This is 35 cents and 70 cents less, respectively, than initially estimated when the bond issue went out to voters at an estimated interest rate of 3.5 percent.

Aaron Rudio of D.A. Davidson said interest rates are at a historic low and Kalispell Public Schools trustees are taking advantage to pass the savings onto taxpayers by re-funding old bonds.

“Re-funding is the same concept as refinancing a house at a lower interest rate,” Rudio said. 

Trustees approved a resolution Nov. 13 to refinance $10.9 million in bonds from 2005 that paid for the renovation of Kalispell Middle School. Those bonds originally sold at a 4 percent interest rate, but the district can save $510,172 if lower interest rates are locked in. 

Trustees also are considering refinancing 2005 bonds used to build Glacier High School.

At the time of both bond issues, Rudio said he never thought either would be a candidate for re-funding.

“We’ve been at a low period of interest rates for some time, but now because of the world economy they’re sort of at ridiculous levels you and your taxpayers can take advantage of,” Rudio said.

 Reporter Hilary Matheson may be reached at 758-4431 or by email at hmatheson@dailyinterlake.com.