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Ridgewood High School anticipates $1.5 million savings by refinancing bonds

Ridgewood High School District 234 refinanced bonds this month, a change officials say will save taxpayers $1.5 million in interest costs over the next nine years.

The bonds, called Series 2009 bonds, were issued in July 2009 for $10,570,000. The funds from the bonds were used for fire prevention, health and safety improvements, renovating classrooms and other facilities updates, according to Tom Parillo, assistant superintendent of finance and operations.

The district had agreed to pay for the bonds until Dec. 1, 2028, at an interest rate that varied from 5.75% to 6.4%, Parillo said. With interest, the total came to $17,596,217.

This month, the district instead refinanced the bonds to Series 2019 bonds under new owners. The bonds will still be paid off by 2028, but at a lower interest rate.

“We’re not extending the bond. We’re keeping the same length and saving taxpayers money,” said Superintendent Jennifer Kelsall.

The Series 2009 bonds were, along with other bonds, issued to fund life safety after a successful 2007 referendum, Parillo said.

The bonds were Build America Bonds, which became available in 2009 after Congress passed the American Recovery and Reinvestment Act of 2009, a stimulus package under which the federal government would subsidize interest rates on Build America Bonds taken out by local and state governments.

The district began making payments June 1, 2010. As of this month, the total remaining on the bonds, including interest and after the Build American Bonds summary, would have been $13,421,194.

Under the new Series 2019 bonds, the total principal amount due is $9,090,000 with an interest rate that varies between 4% and 5%, with a true interest cost of 1.49 percent, according to Parillo.

The total due including interest for the new bonds is $11,695,678 — meaning the district, and taxpayers, will save $1,503,610 in interest costs, Parillo said.

The series 2009 bonds were sold on Aug. 15 and the sale closed Sept. 5. The new bonds are owned by FTN Financial Capital Markets, Morgan Stanley, Raymond James, Ramirez and Company, Wiley Brothers Aintree Capital and Ziegler.