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SVVSD to save $1.59 million in voter-approved bond debt

The issued debt, also known as 2010A General Obligation Bonds, was approved by voters in 2008.
Screen grab from SVVSD's Board of Education meeting on Apr. 28, 2021

On Wednesday night, the St. Vrain Valley School District board of education voted unanimously to pay off the remaining debt of the Tax-Exempt General Obligation Bonds from May 2010.

The issued debt, also known as 2010A General Obligation Bonds, was approved by voters in 2008 and totaled $8,590,000 with an interest rate of 5.25% to be paid off over 15 years. The final payment date is currently scheduled for Dec. 2025, according to the meeting agenda packet

The approximated total interest to be paid at the end of the life of the bond would total over $6.5 million, according to Tony Whiteley, SVVSD executive director of budget and finance. 

In Dec. 2020, the bonds became subject to redemption, giving the district the opportunity to clear the debt and save over $1.5 million of interest, Whiteley said. 

This action will reduce the total interest on the bond to $4.99 million, according to the agenda packet. 

“As we look for savings opportunities, we have available reserves in our bond redemption fund to be able to pay those (bonds) off early. We’re gonna be able to pay these off early by about four and a half years shorter than that 15 year life,” he said.

All money collected through taxes goes into a service fund that is exclusively used to pay off the bonds the district issues, Whiteley said.

“This will free up additional resources to make sure that we are able to pay future debt service,” he said. “if there are any future bond issuances we’ll be able to have the capacity to be able to take those off.”

No principal payments have been made, to-date, to the 2010A General Obligation Bonds so the outstanding principal balance to be paid remains at $8.59M, according to the agenda packet. 

In addition, Whiteley said the district has a cap in terms of how much debt it can take on so paying off these bonds would allow for more debt to be potentially issued in the future as needed.  

The decision to settle this debt came after meetings with the finance and audit committee during which participating members agreed the approach was a proactive way of looking at efficiencies within the district, according to Paula Peairs, SVVSD board of education vice president.

“It’s just another example of how on the ball you guys are as far as watching our finances and looking at the horizon and kinda understanding how best to use that money,” she said.

Superintendent Don Haddad said the past year has been especially complicated in terms of finances given new funding streams as a result of the pandemic, including the Elementary and Secondary School Emergency Relief and COVID Relief Funds.

“It’s all new and you guys (budget and finance department) are doing great work,” he said. “Thank you very much for your long hours and for the detail that you pay close attention to in making sure that we stay stronger financially.”

The 2010A bond is expected to be paid off in June 2021. 

Silvia Romero Solís

About the Author: Silvia Romero Solís

Después de viajar por el mundo, Silvia llegó a establecerse en Longmont. Ella busca usar su experiencia en comunicaciones y cultura para crear más equidad y diversidad en las noticias de Longmont.
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