MOUNT VERNON, N.Y. (Aug. 14, 2017) —– Taxpayers in the Mount Vernon City School District will see the benefits of the district’s recent Standard & Poor’s historic rating upgrade from “A” to “A+,” which will save the district millions of dollars in interest payments over the next 15 years..
S&P Global Ratings’ upgraded rating has allowed the district to do the following:
The district has sold $50 million in 15-year construction bonds to JP Morgan at a 2.3 percent interest rate, which is 1 percent lower than the district’s financial advisors initially expected.
In addition, the district also sold $3 million in short-term debt to Sterling National Bank at a 0.73 percent interest rate, which is considered an exceptionally low rate in the industry, according to Ken Silver, the district’s Assistant Superintendent for Business. This low rate of interest will save the district some $16,000 in the next year.
In its entirety, the savings is approximately $3.2 million in total debt service in the construction bond and short-term debt sales.
“The bond rating we now have is the best we’ve ever had in the history of the school district,” Silver said. “Parallel to our commitment to educational excellence, we are committed to prudent fiscal management and to be wise guardians of taxpayer money. The bond and short-term debt sales are an example of the many different ways we look to save money and further focus on academic achievement.”
An additional benefit, Silver added, is that the district will use the cost savings to help finance the various, approved construction projects currently taking place. The district will also invest funds, not immediately needed, at a rate of 1.25 percent, which Silver said is an outstanding interest rate to be offered in this economy.
This short-term investment is expected to generate several hundred thousand dollars in interest income before being needed to pay construction costs.
About Mount Vernon City School District
With more than 8,000 students in 16 schools, the Mount Vernon City School District is committed to providing a quality education to its children as well as developing programs that meet the diverse academic and social needs of its students.