Refinancing Bond Debt Saves Taxpayers $1.7 million

Groveport Madison Schools Treasurer Felicia Drummey, along with representatives of Baird Financial Services, Inc., have completed the refinancing of a portion of the District’s 2014 School Facilities Construction and Improvement Bonds. The $9.2 million refinancing will save taxpayers approximately $1,700,628 in gross debt service over the life of the issue by reducing interest costs from 4.55% to approximately 2.78%.

The concept is very similar to refinancing your home mortgage. Since the bonds are repaid by a voted bond levy, initially approved in May 2014, the $1,700,628 in interest savings over the remaining term of the bonds will flow back to the taxpayers in the form of a bond millage reduction. The County Auditor will determine the exact bond millage reduction, but as of today, based on the current assessed valuation, the estimated reduction is 0.10 Mills.

“We’ve been working very hard to implement strong financial controls and to manage the resources we’ve been provided as efficiently and effectively as possible,” said Drummey. “As an administration, we always strive to be good stewards for the taxpayers and save the community money. We are constantly monitoring opportunities such as this refunding and glad we could achieve such strong savings.”

Mike Burns, Managing Director of Baird, the District's placement agent stated, "During a time of unprecedented interest rate increases, the District was able to quickly act to lock in these savings. Some legal constraints bound the timing of the refunding, but the administration found a creative solution to maximize the savings by locking the rates in early. Had the District waited until today to lock in the rates, there would not have been any savings for the taxpayers."

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