SPRING LAKE PARK, Minn. – (June 23, 2016) – The agenda for the June 14 Spring Lake Park school board meeting included some good news for residents. As a result of a lower interest rate on the recent bond sale, the tax impact of the recently approved bond referendum will be lower than initially anticipated.
The Spring Lake Park School Board approved the sale of building bonds, which was approved by voters in the April 26 bond referendum. The interest rate on the bonds will be 2.76 percent, which is significantly lower than the estimated interest rate used in January 2016 to determine the tax impact of the bond referendum for district residents.
“The district has done a tremendous job of managing its financial resources and in increasing its fund balance, with a strong management team,” said Joel Sutter, financial advisor, Ehlers, Inc. Sutter also noted that the district’s positive financial standing attracted several bidders to the bond sale, which combined with the lower interest rates, resulted in the tax savings for district residents.
Information shared with residents prior to the bond referendum election stated that the initial cost of the bond referendum was $113 per year or $9.42 per month for a home valued at $200,000. The information also stated the net cost of the bond referendum for taxpayers will be reduced due to a recent bond refunding – similar to refinancing a home mortgage – approved by the school board. The bond refunding saved the owners of a $200,000 home about $42 per year, resulting in a net cost of the bond of $71 per year or $5.91 per month.
Because of the lower interest rates on municipal bonds at the time of the bond sale, the actual tax impact on a $200,000 home will be $52 per year or $4.33 per month.
The bonds were sold on Tuesday, June 14, and financial advisor Sutter noted that “it was a very good day to sell bonds and your taxpayers will benefit from it.” Interest rates on municipal bonds were at the lowest level in over 50 years when the SLP Schools’ bonds were sold on June 14.
As part of its ongoing commitment to effectively manage the district’s finances, the Spring Lake Park School Board and administration take regular action to reduce property taxes contributed by district residents. Along with the recent reduction in property taxes on the bond referendum, these actions include:
• Approved three bond refunding opportunities in the past five years to reduce taxes for local residents, resulting in about $110 savings per year for the owners of a $250,000 home. A bond refunding does not result in any type of savings for the school district and means a tax savings for district residents.
• Paid off debt early on facilities, including the District Services Center and high school turf, which allowed the district to construct classroom additions at Northpoint and Park Terrace in phase 1 of the facilities study at no additional cost to district taxpayers.
• Approved the 2016-2017 property tax levy at an amount lower than the previous year, resulting in a tax decrease on the school portion of property taxes.
• Monitored the district’s property tax levy on an ongoing basis and over the past four years, the district’s tax levy has only increased by .2 percent, one of the lowest amounts in the metro area
