Russ Gibb at Random

DPS save taxpayers $

January 4, 2007

District Action Will

Save Taxpayers $4 Million

The Dearborn Board of Education took action at their December meeting that will result in long-term savings for Dearborn taxpayers. The district refinanced a portion of the bonds that were part of a $150 million proposal approved by voters in March 2002. The refinance will save taxpayers approximately $4 million in interest expense over the next 16 years.

“The sale of the refunding bonds is not only good business, it is our responsibility as a school district to take action when it will result in savings to the taxpayers,” commented Director of Business Services, Bob Cipriano.

This is not the first time that the district has taken action to save taxpayer dollars. Several times, dating back to 1991, the district has refinanced debt to save residents millions of dollars in interest payments. In addition, projects funded by the sale of bonds have come in on or under budget and on or before schedule.

“The district is delighted to be able to take action that will save our residents $4 million. It’s vitally important that the Board and administration continue their practice of being good stewards of public funds,” commented Dr. John Artis, Superintendent.

In preparing to sell the 2007 Refunding Bonds, the school district, working with their financial advisor, Stauder, Barch and Associates, Inc., requested that Moody’s Investors Service and Standard and Poor’s Ratings Services evaluate the school district’s credit quality. The school district maintained their Moody’s and S&P ratings of ‘A2’ and ‘A+’, respectively. The School District financing was conducted by the Michigan investment banking office of the brokerage firm, A.G. Edwards & Sons, Inc.; the financial advising firm, Stauder, Barch & Associates, Inc.; and the law firm serving as bond counsel, Dickinson Wright PLLC.

“Brenda Voutyras, Vice President and Manager with A.G. Edwards, states: “The School District Bonds were well received by the bond market. We saw very high levels of demand. The bond sale was well timed to take advantage of current low interest rates.”

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3 Comment(s)

This could easily be a double egded blade.

For the unaware:

Remember that when you refinance you have to re-pay the non-interest payments, despite interest going down considerably. Depending on how much the District HAS spent between 2002-2004, the $4 million saved in Interest could easily be lost because of previous payments. Until the district submits how much they've ALREADY paid, I have a sinking feeling this could be a monumental mistake and a gross loss.

Also, I'd like to note that whatever amount they have already spent 2002-2006 has to be deducted from the wonderful $4 million they are pro porting to save. It's highly unlikely, if an interest deduction can reduce payments by $4 million over 14 years, that we haven't spent that already in 4 years from our regular payments.

Ever wonder why refinancing is so popular with banks? Because it sounds great and you lose money to the bank!

Now I'm going to symbolically flush my toilet as a representative of our district's fiscal policy.

God save us!!

--by Brian on 1/4/07   Lives: Dearborn  

Russ, Are you now working for the DPS Public Relations department ?

--by Dearborn teacher on 1/5/07   Lives: Dearborn  

Does DPS really need a public relations dept? Seems like they could care less what people think of their blunders. After all, we just keep electing them.

--by Truth is painful on 1/6/07   Lives: Dearborn  

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