Hauppauge Public School officials announced the district had saved $1.6 million for taxpayers by refinancing older capital bonds during over the summer months.
James Stucchio, assistant superintendent of business and operations, said the district took action to refinance bonds worth $16,825,000 at lower interest rates over the summer. The manuever was one "plus" in a time of funding cuts.
Hauppauge's Board of Education voted in June to approve refunding its callable bonds, once that can be recalled under terms of their sale contract, from 1998, 2002 and 2033 to refinance them at lower interest rates. This lowered the district's debt payments by reducing the amount of interested owed, according to Stucchio, who compared it to homeowners who have refinanced their mortgage.
"There will be $130,000 saved in this fiscal year. That's additional money we'll have this year to put towards other items," Stucchio said.
The $1.6 million in savings is stretched over the next 10 years, as the 2002 and 2003 bonds will not be fully repaid until 2021. It's a financial benefit that keeps paying, Stucchio said.
"Next year, with regard to the refinance, that's $170,000 less that we need to put in the budget. It will help save teaching positions and programs," he said.
Refinancing the bonds was one-shot opportunity to save money, Stucchio said, as its unlikely the district will ever look to refinance the $28 million in bonds taken out for the 2009-2010 capital improvement projects.
"We already have very low interest rates," Stucchio said. "I don't know if we'll have a point where interest rates are lower than they are now, where refinancing will be beneficial."
In addition, the assistant superintendent said the district borrowed $2 million less in tax anticipation notes this year, money used to run the district until property taxes are paid in December. The delay combined with a low interest rate, 0.28 percent, will also save the school thousands this year.