Seneca Valley to Save More Than $300,000 with Bond Refinancing

is hoping to save more than $300,000 over the next three years by refinancing close to $10 million worth of bonds.

At Monday’s school board meeting, officials unanimously voted to move forward with refinancing bonds taken out in 2004 for additions to the . The district also refinanced those bonds in 2007.

By taking advantage of current low interest rates, business manager Lynn Burtner estimated the district would save roughly $320,000 — a little more than 3 percent of the debt amount.

Savings would have amounted to more than $500,000, but Burtner said the district would have to pay about $244,000 to the federal government for its share of the savings.

District bond council Robert Aumer, of Janney Capital Markets, said if the district waited to refinance until 2014 — when that type of loan would have been called back — it would not have to pay the government a share of the money. A bond seller may reserve the right to change its mind and “call” that type of bond early — paying off the principal and ending the loan before it matures.

But Aumer said there are no guarantees interest rates would be as low as they are now more than two years in the future. He advised officials to move forward with the refinancing. 

Burtner said the district would structure the savings so that the district would save an estimated $136,000 in the 2012-13 school year, $138,000 in the 2013-14 school year and $41,000 in the 2014-15 school years.

The savings would help ease the burden of the district's budget in the next several years, she said.

“It's that much less we have to pay in debt,” she said.

The school board will officially adopt a resolution refinancing the bonds at its next meeting on Sept. 19.