Written by D.F. Karppi Tuesday, 23 June 2009 16:32
At the June 16 Oyster Bay-East Norwich school board meeting, Superintendent of Schools Dr. Phyllis Harrington announced that reports in the press that the district saved $45,000 didn’t give the administrators full credit for the scope of the story. It was much better than reported!
Assistant for Business Christopher Van Cott explained the benefits in full. He said, “I wanted to let the board of education and the community know that there was actually a larger savings due to the Bond Refinancing itself, not just the Moody’s portion of the story. The following is a summary of the events surrounding our refinancing.
“We took advantage of the current interest rate market by refinancing previously issued bonds. As part of the process, we asked Moody’s (an agency that rates an organization’s financial health) to review our current bond rating of Aa3. After an audit of our financials, they determined that our fiscal status more closely resembled a rating of Aa2, not Aa3. This was due to the BOE’s commitment to funding reserves.
“As a result, they upgraded the district to Aa2.
“Because of this upgrade, we received a lower interest rate than we would have at Aa3. This lower interest rate saved $45,000. In total, we will save approx $480,000 over the next eight years from the refinancing of debt. If we did not receive the Moody’s upgrade, our savings would have come in around $435,000 ($480,000 minus $45,000),” Mr. Van Cott concluded.
It is a great final - to the story as reported - and one we appreciate. Mr. Van Cott’s explanation makes the bond rating benefits even better – and a better story to report.
Our congratulations to the board on sticking to its decisions to think ahead and set up reserve funds that make the district financially healthy.