School district refinances outstanding debt, saves more than $5,107,000

The Gunnison Watershed School District RE-1J took advantage of historically low interest rates and re-funded $48,030,000 of its 2008 and 2009 bond issues on October 9.

The refinancing will save taxpayers $5,107,136 of interest expense over the remaining life of the bonds. The refunded bonds carried yields of 3.25 percent to 5.25 percent, and were replaced with bonds with yields ranging from 0.15 percent to 3.21 percent. Annual savings from 2015 to 2033 will average around $265,000.
“We were very happy with our final savings figures, as the last few weeks leading up to pricing saw corrections in the stock market and confusion about the future direction of US interest rates,” said Gunnison Watershed business manager Stephanie Juneau.
Working with bond underwriter George K. Baum & Company of Denver, Gunnison Watershed was able to lock in a true interest cost of 2.94 percent as a result of the district’s strong credit rating of “Aa2” as well as the scarcity of comparable high credit quality obligations.
With a lack of other high credit quality obligations in the market at the time Gunnison Watershed’s bonds were offered, the school district was able to obtain interest rates even lower than higher rated school districts like Douglas County and St. Vrain (Longmont).
“In fact, the school district was able to capture interest rates that were substantially lower on a relative basis than recent refundings from comparably rated school districts such as Poudre Schools (Fort Collins) and East Grand Schools (Winter Park),” said Todd Snidow of George K. Baum & Company.
“We are delighted to be able to save our taxpayers more than $5 million of future property tax payments,” said superintendent Doug Tredway. “I would like to be very clear about these savings. They will go directly to the taxpayer and will equal about $4.57 per $100,000 of a home’s actual market value as determined by the county assessor. The School District will not see any economic benefit from the savings and will not receive any additional funds for operating expenses.”