The Duluth School Board Tuesday night voted to refinance a chunk of long-range facilities plan debt, reducing taxpayer burden by $6.8 million over the next 11 years.
The board was acting on advice from financial advisers who said earlier in the month that the market was right to refinance one particular bond, which helped pay for the $315 million plan. A favorable sale of debt Tuesday morning means savings of $624,000 a year through 2028, when the bond will be paid in full.
"This is truly taxpayer savings," said Steve Pumper, of PMA Financial Network, noting it was a "wise and responsible" decision to approve the measure.
The amount of that bond - one of several for the long-range plan - to be refinanced is about $87 million. It started at $111 million in 2008.
The board voted 5-1 to refinance, with member Art Johnston voting against it and Nora Sandstad absent. Johnston - who has advocated to lower long-range plan debt repayments by extending them (which would result in paying more interest over time) - said he opposed the measure because it wasn't enough, casting doubt on the guidance of the district's financial advisers and bond counsel. They have told the board that the state won't allow it to extend payments unless they would result in savings.
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"I appreciate you trying to save money for the taxpayer but I think we could have done better," Johnston said, noting his desire to increase funds for classroom expenses.
Member Alanna Oswald said she couldn't "turn down" $624,000 in annual savings, although she hoped to find other savings in the future.
Member David Kirby, too, said the board should accept savings to taxpayers, and listen to its experts.
A smaller portion of long-range plan debt was refinanced last year. Superintendent Bill Gronseth has said the district will work to refinance whenever savings can be gained.
