SAU 8 To Consider Re-Bonding Elementary School Project Debt

CONCORD, NH — Concord school board members will host a public hearing and vote on a plan next week to allow the SAU 8 district business manager to refinance the district's elementary school consolidation project debt at lower interest rates. The district borrowed around $55 million in Build America Bonds in 2010 to pay for the project across three decades. Next October, the 10-year mark, "the call date," comes up on the bonds, allowing the district to refinance the remaining debt on the bonds with limited penalties.

The process of refinancing takes time but the interest rates are at historic lows, according to Jack Dunn, the district's business administrator. He said it might be in the district's best interest to go out into the market now and refinance the leftover principal, about $40 million.

The Build America Bonds have a slightly higher interest rate, 3.62 percent, but the federal government issued a refund on that interest. The refunds stopped during sequestration so the district has been stiffed about $80,000 to $100,000 while also paying the higher interest rate. The district's bond agents have been eyeing interest rates and recently helped the district finance new roofs at 1.5 percent.

Dunn offered a conservative guesstimate of around $200,000 in savings annually if the board decided to refinance. The savings could be put into a trust for future use for a new Rundlett Middle School project, Dunn said, be used to stabilize future tax rates, or a hybrid of the two.

"With the potential of Rundlett and having these potential savings, could help, again, smooth out that impact on the tax rate," Dunn said.

The consolidation project led to the construction of three new elementary schools and the sale of one of the schools, Walker, to Binnie Media for a radio station complex. Dame was donated to the city for a community center, Dewey was converted into the district's central office, and Eastman is being leased. Three historic school structures, Conant, Kimball, and Morrill, were demolished. The final cost of the consolidation project was $90.8 million.

Part of that cost was also offset by state school building funds which are no longer available and it is unknown of there will be state money for Rundlett. Costs of a potential new middle school to replace the 60-year-old structure have varied in the $50 million to $84 million range, depending on the configuration, whether or not fifth-graders are moved into the school, or the district enters into an agreement with the YMCA for partial usage of the building for its programs. The tax impact on a $250,000 home would be an increase of $370 to $420 annually on a current tax bill of around $7,300 annually.

Earlier this year, the school board decided to nix an option to renovate the building even though the western wings of the school were rebuilt 30 years ago.

Tom Croteau, a school board member leading the meeting, asked what the savings would be for a homeowner with a $250,000 house. Dunn estimated around $20 to $30 a year.

The Concord Board of Education will meet on Sept. 30, to take a vote on the re-bonding proposal.

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