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Menomonee Falls School District plans debt refinancing

Dec. 11, 2012

Menomonee Falls - The time appears right for the Menomonee Falls School Board to refinance a portion of the School District debt, a move that could save the district $1 million.

Business Manager Jeff Gross recommended the board consider a debt refinance on a portion of the outstanding 2007 general obligation bonds. The Finance and Auxiliary Services Committee approved the refinance at its Dec. 3 meeting and the board is anticipated to make a decision at its Jan. 14 meeting.

The call date of the bonds is April 1, 2017. The Finance Committee looked at a potential refinance in January 2012, but decided to wait and see if interest rates got any lower. Last year, Gross said they were looking at an 8.35 percent savings, or $809,000. If they refinance at the current rate, the district would save about 10.5 percent, or $1,029,000.

Staff has analyzed data to see where interest rates would need to be a year from now to maintain the same level of savings. They determined interest rates could increase by 0.37 percent a year from now, meaning waiting to refinance is a gamble.

"When you look at refinance, you don't want to look at it until you're at a 2 percent savings," Gross said. "Now, it's at 10 percent, so it's a really good savings."

The Finance Committee members did not feel rates could go lower than they are right now.

In order to move forward with refinancing a Moody's bond rating call will be scheduled for Jan. 3, which costs about $12,500. Once the Moody's rating call is complete, Gross said the board should make with the decision to refinance.

"It sounds like the right move to make," School Board President Ron Bertieri said.

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