If you want some perspective on the debt restructuring referendum that will be on the November ballot, read my 7/30/23 post, if you haven’t already.
To further clarify that post, I want to point out that there is a difference between refinancing and restructuring bond debt. Municipal bonds generally have “call dates.” After a certain length of time, the bond issuer has the right to “refund” those bonds, which essentially means refinancing an outstanding bond by issuing a new bond. Usually, this is done to take advantage of a more favorable interest rate.
About six or seven years ago, our school district did manage to save taxpayers a relatively modest amount of money by calling and refunding a Red Plan bond.
Given the cost of borrowing, I can’t imagine what opportunity would presently exist to take advantage of a better interest rate, even if some district bonds are currently “callable.” And there is considerable cost to refinancing and restructuring. Financiers and bond companies don’t do this work for free. They always take a nice slice of the action for themselves.
I wish I were on the school board so I could dig into all of this further and inform the public about exactly what the costs are for this restructuring.
