Reed City School District saves tax payers $564,000

Board of Education approves lower interest rate

REED CITY — Reed City community members will soon see a decrease in their tax bills.

The Reed City Area Public Schools Board of Education recently approved the sale of the 2015 refunding bonds in the amount of $7,645,000, approximately $564,000 less in interest than the previous bonds.

Every few years, school districts have the opportunity to refinance their bonds. A bond is a “loan” from the government to the school district. Taxpayers help repay the bond through property taxes.

When schools refinance their bonds, it means they are again borrowing from the government, typically with hopes the millage rate or interest rate goes down.

“We did not extend the length of our bond, we sold them to a different financing company,” said Tim Webster, Reed City Area Public Schools superintendent. “This company gave us an interest rate of 3.18 percent instead of 4.15 percent it previously was at. This is going to save the tax payers some money.”

The district’s current bond lasts until 2029 when they will have the opportunity to once again refinance.

Although the district will be saving taxpayers money with the lower interest rate, it will not effect the school’s budget.

“The way the market is right now, we are getting a better interest rate for the remainder of the loan,” Webster said. “It’s a wonderful thing.”

For more information, contact Webster at (231) 832-2201.