Pottstown school bond refinance could save $500K

POTTSTOWN — The school board is moving ahead with a bond refinancing that could save the district between $300,000 and $500,000. The bond is from 2017 and still has $9.915 million on it.

Jamie Schlesinger, from PFM Financial Advisors LLC explained to the board at the Oct. 17 meeting that the current interest rate on the bond is 2.55 percent but in eight years will re-set to a variable rate as high as 4.5 percent.

He said the better option is to lock in a lower interest rate now, while they are at historic lows, for the life of the bond. "We won't do it if you won't save money," he said, explaining that because of the variable rate, the actual savings will not be known until the bond is fully paid off. 

As a result, the motion the board passed Oct. 17 night is to set "parameters" for the bond sale. Because of the structure of the bond, the savings will be realized over the life of the payments instead of in one lump sum, as often happens with re-financing.

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