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Building Bonds Sold at Significant Cost Reduction to Westonka Taxpayers
Borg Report July 15, 2016
I have some good news to share about the recent sale of our building bonds for the purpose of financing the community athletic and recreation center and performing arts center at Mound Westonka High School.
A dramatic drop in interest rates, coupled with the district's strong credit rating, has resulted in a significant reduction in the cost to Westonka taxpayers for the school building bonds approved by voters on May 10, 2016.
Cost reduction of over $3.4 million
At the July 11 Westonka School Board Meeting, the board approved the sale of the $20,815,000 in building bonds at an interest rate of 2.19%. Interest rates on municipal bonds have dropped considerably since last winter and even since the pre-sale report was prepared for the school board in June. As a result, the actual true interest cost rate on the bonds is substantially lower than the estimates prepared prior to the election (3.5%) and in the pre-sale report (2.71%). The total principal and interest over the life of the bond issue will be approximately $3,409,000 less than the estimates used prior to the May 10 bond referendum.
On top of the good timing on bond interest rates, the district's strong credit rating further assisted in securing a low rate. Moody's Investors Service assigned the district a strong underlying bond rating of Aa2.
What does this mean for taxpayers?
As a result of the favorable bond sales, the annual property tax increase on a $300,000 home will drop about $12 per year from the pre-election estimate, from $76 to $64 per year.
We greatly appreciate the community's support of these and other facilities projects moving forward. The community athletics and recreation center and performing arts center are both scheduled to be completed by fall of 2018. If you have any questions about the recent bond sale, please feel free to contact me directly.
Sincerely,
Kevin Borg, Superintendent
borgk@westonka.k12.mn.us
(952) 491-8001