District saves $3.4 million on bond
LYNDEBOROUGH — In a decision that is anticipated to save the district about $3.4 million over the course of the life of a $8.4 million bond to pay for renovations to the district’s elementary schools, the district has agreed to enter a 20-year bond, as opposed to the 30-year bond the district originally proposed.
The bond is expected to pay for renovations and an addition to Florence Rideout Elementary School — which will allow students from both towns to attend one school — as well as renovations to Lyndeborough Central School, which will be converted into a preschool, kindergarten program and SAU offices.
During its June 24 meeting, the Wilton-Lyndeborough Cooperative School Board met with Sheila St. Germain of the New Hampshire Bond Bank to sign the bond agreement. St. Germain recommended that the board enter the shorter loan, because the savings would be significant for the district, according to draft minutes of the meeting.
In an interview Monday, School Board Chair Geoff Brock said that the board had first presented a 30-year bond when pitching the elementary school renovations and addition to the public, because the board was concerned that high bond rates would mean that any shorter bond term would have too large of an impact on Wilton during the last years of the bond. However, he said, bond rates for a 20-year bond were significantly lower, and although it’s still expected that payments in the last year of the bond will be higher for Wilton than under a 30-year bond, the majority of the payments will be lower than anticipated. And not making payments in the remaining 10 years will ultimately save the district a total of $3.4 million overall.
“The way the bond sales went down, there are no negatives,” said Brock about entering into a 20-year bond. “Everyone saves a fortune.” Most of that, he said, is down to much better than expected rates for 20-year bonds, which were sold at an interest rate of 3.4 percent, when the district was anticipating as high as 5 percent under a 30-year bond. “It’s hard to believe it came out like it did,” said Brock. “The rates were so much better than anticipated. We exceeded our expectations.”
Lyndeborough’s payments towards the bond are not to exceed $96,564 per year, or what Lyndeborough would be saving in consolidation costs, as laid out in the warrant approved by voters in March. Since Lyndeborough will be making 20 payments instead of 30, the town will save $965,000 over the life of the bond. Wilton will pay a slightly lower rate than they were anticipated to under the 30-year bond projections for the first 11 years of the bond. From that point on, they will be paying a slightly higher rate than anticipated, but most of the $2.4 million savings for the town will come from not having to make the additional 10 years of payments, said Brock.
Construction on the Florence Rideout Elementary School in Wilton has already begun, and the center portion of the building where the new addition will sit has already been completed. Hutter Construction of New Ipswich is anticipating pouring the foundation for new construction next week. Construction on FRES will continue throughout the school year, and renovations to Lyndeborough Central School will take place next summer, with construction on both schools anticipated to be completed by the start of the 2015-16 school year.