Refinancing of bonds issued on Tallmadge High School saves $4.5 million

Laura Freeman
Kent Weeklies
The Tallmadge school district saved $4.5 million by refinancing the bonds on the Tallmadge High School building.

TALLMADGE – The school district's diligence and low interest rates have saved the district $4.5 million.

Tallmadge's three new schools were financed through bonds and the one for the high school is eligible for refinancing.

The Tallmadge School Board recently unanimously approved the issuance and sale of the bonds for the purpose of refunding for debt charges savings.

The refinancing is for the same term or length of the loan which will be paid off in 2032 for the high school, treasurer Jeff Hostetler said. The savings are passed directly to the taxpayers.

"It isn't a lot of money spread out over all the [property] taxpayers but it's significant to the community," Hostetler said. 

Each taxpayers would see a reduction proportionate to the tax owed on their property, he said.

Hostetler said one group of bonds was for $6.115 million and the other for $2.53 million.

Then the district built the high school in 2000, bonds were sold in 2005, Hostetler said.

“In 2012 and 2013 we saw an opportunity to refinance those bonds because interest rates had moved, and we refinanced entire blocks of bonds in two separate sales,” he said.

The district saved $3.35 million in interest costs, Hostetler said. In 2018 interest rates moved again and the district refinanced a portion of the 2013 bonds and saved $495,000.

Because interest rates are really low in 2020, Hostetler said, he looked back at the bonds from 2012 and 2013 and refinanced them for additional savings of $675,000.

Overall the district has saved $4.52 million in interest costs from the original 2005 bond sale.

Not all the bonds are at the same interest rates and have different dates for refinancing, Hostetler said.

“We’re always looking at ways to do it [refinance]”, he said. “The good news is we sold bonds on the current construction project in 2017 and have about $38 million worth of bonds.”

Not enough time has passed to refinance those bonds, he said.

“We have to wait five years, but we will keep an eye on those bonds as they become available for refinancing as well,” Hostetler said. “If the interest rates are low, we’ll go through the process with those bonds as well.”

Gannett reporter Laura Freeman can be reached at lfreeman@recordpub.com