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District 191 refinances bonds to save money

By refinancing some of its debt to a lower rate, Burnsville-Eagan-Savage School District will save nearly $174,000 over the next two years.

Board members agreed in September to refinance just over $4 million through a process that is similar to when homeowners refinance their mortgage to take advantage of lower interest rates.

"$174,000 is a very good savings on a small refunding," said Jeff Seeley of Ehlers and Associates, who said the sale of the bonds in October went even better than expected with the district even receiving a premium.

"Your district has the very high rating of Aa2, so there was quite a bit of interest," he told the Board of Education. "The high rating is a testament to the budgeting and finance decisions of the board."

The Aa2 rating affirms the district's financial health, said Seeley. Only nine other school districts in the state are currently rated higher than District 191 by Moody's Investor Services.

A district's bond rating is similar to credit scores for individuals with high ratings resulting in more favorable borrowing rates.

The refinancing will result in a reduction in property taxes levies for taxes payable in 2015 and 2016.

"We continually review our finances to look for places we can save money or reduce costs," said Lisa Rider, executive director of business services. "We have refinanced similar bonds in past years whenever it is possible." 

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Posted: Wednesday, October 29, 2014 - 16:20