BLACKFOOT — The Blackfoot School District Board of Trustees Thursday voted unanimously to refinance bonds issued in 2002 to finance the construction of the Blackfoot High School Gymnasium and the Blackfoot Performing Arts Center.
The School Districted held a competitive bond sale Thursday of the remaining $6,145,000 general obligation refunding bonds. Five bids were received from interested financial institutions, with the lowest bid submitted by Zions Bank with a true interest cost of 2.21 percent. The original true interest cost on the District’s 2002 bonds was 4.69 percent.
“The rates have been great,” said Alan Westenskow, vice president of Public Finance for Zions Bank. “The market cooperated.”
The district received an A1 underlying credit rating on its bonds from Moody’s Investors Service, which is two notches higher than their rating received on the original bonds. The bonds are considered low-risk because the bonds are being repaid by a property tax levy, which allowed the District to get a better credit rating and better interest rate.
“We got almost the very best rates we could have gotten,” Westenskow said.
Interest rates in the tax-exempt bond market have fallen to their lowest levels in nearly 70 years and have never been lower since 1988.
“I’m just extremely excited about the fact that we were able to refinance the bond,” Superintendent Scott Crane said.
The lower interest rate will result in a total interest savings of $695,554.03 over 12 years, or an average of $57,692.84 a year. The interest savings will result in a small decrease in the tax levy amount for district taxpayers, estimated to be approximately $4 per $100,000 in property value.
“It’s a more frugal way of doing business,” Crane said.
Both sides have agreed to the bond sale, and the deal will officially close Nov. 3. Trustee Pete Lipovac was absent.