Refinance saves taxpayers money
Schools’ credit rating is state’s third-highest, underwriter says
The Douglas County School District’s most recent $28.8 million bond refinancing will save taxpayers about $110,000 a year, an underwriter told the board during its Feb. 5 meeting. That amounts to about $1 per property for each of the next 17 years.
The change dropped the interest rate from 5 to 2.99 percent, which shaves about $1.7 million in interest on the debt through 2030. Combined with another refinancing completed in 2012, “that’s over $5 million in gross savings to the district’s taxpayers,” said Dan O’Connell of RBC Capital Markets.
The $5 million savings breaks down to about $3 per taxable Douglas County property per year, according to figures obtained from the assessor’s office. The county has about 110,000 taxable residential, commercial and other parcels.
The AA+ bond rating assigned to DCSD by credit-rating agency Fitch helped ensure the low interest rate, O’Connell said. Fitch cited DCSD’s large operating surpluses and strong financial management in setting the rating.
In its Jan. 28 report, Fitch lists DCSD’s unrestricted fund balance at $86.7 million. Its unassigned fund balance — money not otherwise earmarked by the district for specific uses — is about $18 million.
Some community members say the district is holding more money than it needs, funds that could better be used in classrooms. But board president John Carson was cheered by O’Connell’s report.
“We as a board have set a 4 percent reserve,” he said. “Some people think that’s too high. I think in the economy and budget we’re in, with fluctuations in revenue, it’s the prudent thing to do. Not only prudent for the long-term planning and welfare of our district, but it obviously pays huge financial dividends back to the school district and taxpayers of Douglas County.”
DCSD spokeswoman Cinamon Watson said the district keeps close tabs on its financials.
“We take every opportunity to do everything we can to be good stewards of the taxpayer dollars,” she said. “We’re using it wisely, and producing a great product.”
The Fitch report also notes DCSD’s per-capita debt — about $471 million in general obligation bonds — is above average.
“But Fitch believes this risk is somewhat offset by the district’s limited future capital demands, high wealth levels, and reasonable prospects for continued growth in the district,” it reads.
The AA+ rating puts DCSD near the top among the state’s 178 school districts. The only other districts with a higher rating are Colorado Springs’ Cheyenne Mountain and Aspen, both located in affluent areas, O’Connell said.
“There were some impressive results here,” he told the board.