By: Cara Latham
MILLSTONE The Board of Education voted last week to refinance between $10 million and $22 million in bonds for a possible savings of $647,000 over a period of about 20 years.
At its Nov. 13 meeting, the board approved the ordinance to refinance the 2004 bonds, which are being used to finance the building of the district’s new middle school on Baird Road. The new middle school will be completed sometime in 2007, ahead of the 2007-08 school year. Grades six through eight will be in the new middle school.
The bonds can’t be cashed until 2014, and are currently placed in an escrow account to help pay for current debt service.
Board Secretary Brian Boyle said the school board, with the help of its financial adviser, will begin looking at the market in December to determine where the district can save money and whether it will be able to refinance anywhere from $10 million to $20 million in bonds.
"We’re issuing bonds to replace other bonds," said Mr. Boyle, adding that the district would be saving on interest.
An analysis done in October projected that the district could save $647,000 in interest charges over the life of the loan, which, in effect, lowers the tax rate, Mr. Boyle said.
The current tax rate is $1.78 per $100 of assessed property value. The average-assessed property in Millstone is $410,100, meaning that the average homeowner pays $7,298 in school taxes.
"What we’re looking to do is lower the amount of taxes we have to levy in order to pay for the bonds," he said. The board is "always excited to save money. The board’s happy with it. This will be our fourth (refinancing). We’ve saved the residents of Millstone a lot of money."
The board has refinanced about $34,517,000 all together in bonds from 2003, 2004 2005, and now in 2006, for a total of about $1 million in interest savings, which taxpayers will see gradually over the upcoming years, he said.
"The savings aren’t all at once," he said. "It’s savings in interest over time."
The district still owes the debt, but it just exchanged a higher priced debt for that of a lower price, he said, adding that it has to be determined that the district will save at least 3 percent with the refinancing before it does so.
After examining the market in December, board members are hoping to close in January, but the ordinance gives them a time frame of up to a year to complete the refinancing.
"If the market does not rise, we’ll wait until we have an opportunity," he said.
"We’re always happy to save the taxpayers money, and these are the types of things we try to do to lessen the tax burden," he said.

