By Gabe Licht
DELANO, MN A competitive bond market coupled with Delano Public Schools’ high bond ratings resulted in $2.1 million in savings as the district sold $62.9 million in bonds to Wells Fargo during a special school board meeting Tuesday.
“Because Wells Fargo is paying a premium, we had to sell $2.1 million less,” Business Manager Mary Reeder said. “The district is saving that $2.1 million.”
Not only is Wells Fargo paying a premium for the bonds, but the financial institution also came in with an adjusted interest rate of 2.8 percent, compared to the projected interest rate of 3.15 percent. Other institutions offered larger premiums, but those bids came with higher interest rates that would have cost the district more in the long run.
“This will save our taxpayers going forward, not in 2016 because we already levied in December based on that estimate, but it will save the average person with a $225,000 house $38 per year,” Reeder said.
Low interest rates also freed up an additional $185,000 in funds to be used toward the project.
Reeder said the district’s AA3 bond rating from Moody’s and the AA2 enhanced rating the district receives from participating in the state’s credit enhancement program contributed to the favorable bids.
The district received a total of nine bids for the bonds.