GRPS save over $726k due to bond rating, refinancing | Community Spirit
Grand Rapids Public Schools announced today the successful sale of $4,830,000 million in tax-exempt bonds that was directly purchased by PNC Bank through a competitive process. The district will use the proceeds to refinance its existing 2002 debt, which generates savings totaling $726,332 that will be realized over the next 10 years.
The district will now pay 1.79% interest rate on the 2012 bond and replaces an approximate interest rate of 5% on the 2002 debt. The 2002 debt was used to finance the construction of an addition and furnishings at Southwest Community Campus at 801 Oakland, S.W. Grand Rapids. Southwest Community Campus, one of Grand Rapids Public Schools’ theme schools, houses a well established two way immersion (English/Spanish) program.
Last year, both Standard & Poor’s (S&P) and Moody’s improved the district’s bond rating from negative to stable. The S&P press release stated, “The outlook revision is due to our view of the district’s improved reserve position and management’s ability to implement budgetary adjustments in response to declining enrollment and the uncertainty of state funding” (S&P News). In February, Fitch affirmed the stable, A+ rating.
“We have had to make some very difficult, but necessary decisions to balance the budget and bring our operations in line with our revenues and enrollment,” said Julie Davis, Executive Director of Finance. “The savings achieved today is truly a testament to the fiscal stewardship of the Board of Education and this district’s commitment to being sound managers of the taxpayers’ dollars.”