Board expects $3.4M in savings from refinancing

SOUTH BRUNSWICK - Taxpayers will benefit from some wise investment decisions from the school district, according to Board of Education officials.

The refinance of bonds held by the schools will yield $3,448,000 in savings, which will go toward paying off a little more than 7 percent of the district's total debts. The schools plan to release this money over the course of four $800,000 yearly installments.

"A lot of work went into it and the markets went our way," said Ken Phillips, from RBC Capital Markets, who explained the savings to the board during its Monday meeting.

According to district Business Administrator Anthony Tonzini, the bonds were originally purchased in 1997. Lowered interest rates prompted the district to cash these bonds in April of this year and reissue new ones, leading to the $3 million windfall. Tonzini said that the district had considered making a move about a year and a half ago, but decided to wait a little bit longer, a decision he said was a good choice.

"We thought we might be better served by waiting, and fortunately we did wait, because at the time we would have saved about $1.5 million and we've saved significantly more by waiting. Since that time, we refinanced, rates have federally climbed up, so we picked a really good time to do it. Some of it's luck, but at the same time there's patience and good advice," said Tonzini.

Board members were glad to hear of the savings, noting the benefits to the taxpayers in their comments.

"It's a relief to the taxpayers to see these kinds of savings," said board member Matthew Speesler.

"The $800,000 per year for the next four years … is quite a savings force," said board President Martin Abschutz.

- Chris Gaetano