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More savings for taxpayers as second bond refinanced
For the second year in a row, Snohomish school leaders saved local taxpayers money by refinancing an existing school construction bond.
This time $818,990 will be saved over the next two years until the newly refinanced bond is paid off. These savings are on top of almost $23.7 million saved in 2020 with the refinancing of an earlier existing bond. Unprecedented low interest rates made both of these savings possible.
These reduced bond collections and stable proposed levy tax rates contribute to an overall declining tax rate for Snohomish School District property owners.
Bonds are similar to a home mortgage. Typically, bonds are used to pay for new school construction and/or large renovations of existing facilities. Learn more about how Snohomish schools are funded.
2004 bond projects included construction of Glacier Peak High School and Little Cedars Elementary. Projects approved by voters in 2008 included replacing Machias and Riverview elementaries and Valley View Middle School, completing the Snohomish High School renovation and expansion project, renovating Centennial Middle School and the Parkway Campus and building the Snohomish Aquatic Center.
Like a homeowner with a mortgage, school officials watch interest rates closely. “We have been monitoring the market closely over the past several months and working diligently to refinance these bonds,” said Tom Laufmann, the district’s Executive Director of Business Services. “Compared to the old rate on the bonds the new rates are rather astounding.”
A new rate of just 0.8%, a new record low for the district, was garnered for the 2021 refinance. This compares to the 5.00% rate assessed when the bonds were first issued. The 2020 refinance qualified for a 0.81% rate. Those bonds were originally financed at 4.00%.
“This was another fantastic opportunity to demonstrate good fiscal stewardship and save our taxpayers a significant amount of money,” said Superintendent Dr. Kent Kultgen.
He emphasized that the savings will go directly to taxpayers through lower future tax collections. These reduced bond collections and stable levy tax rates contribute to an overall declining tax rate for Snohomish School District property owners.
We are committed to openness and transparency. Learn more about the February 8, 2022, replacement levies.