Tuesday, April 03, 2001

Lakota schools benefit from upgrade on bonds




By Sue Kiesewetter
Enquirer Contributor

        WEST CHESTER TOWNSHIP — An increased bond rating for the Lakota Local Schools is expected to result in considerable savings to taxpayers.

        Moody's Investor Service has increased the district's rating from A1 to AA3, said Alan Hutchinson, Lakota's treasurer. It could mean savings of $500,000 to $1 million in interest costs when the district sells $44 million in bonds Wednesday. The 25-year bonds are being issued to pay for school construction and renovation.

        “It all depends on where the market places the value,” Mr. Hutchinson said.

        In November, voters approved a combination issue that included a $44.5 million bond issue to pay for construction of the district's 11th elementary and fourth junior school. Money would also be used to add classrooms to Lakota East and West high schools, buy computers and upgrade buildings.

        “The ratings are based on the district's growing tax base, below-average debt burden and strengthened financial operations,” Moody's said in a release to investors.

        The interest debt is expected to decrease even more, depending on the interest rates on Wednesday.

        Mr. Hutchinson explained that when the bond issue was put together last fall, he estimated selling bonds with a 5.75 percent interest rate. It now looks like the rate will fall between 5.25 percent and 5.30 percent, he said.

        The lower interest rate combined with the higher rating means the district will have to pay less than expected for debt service and therefore may not need to collect the full 1.84 mills that voters approved.

        “When property is reappraised next, it could drop as much as a mill,” Mr. Hutchinson said.

       



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