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Show Eond election called to refinance school debt The Park City Board of Education - has scheduled ait election on Aug.' 6 ; to refinance about $0""milli6n In ; bonds issued in 1982. Voters will be asked to approve an additional bontl issue of between $500,000 and $1 million. Officials say approval of the additional bonds will not cause an increase in taxes and should, in the long run, save the district money, i The refinancing transaction was described as a swap of the 1982 bonds with "refunding bonds" issued at a lower rate. That description was offered by Eric Pehrson, a representative of Prudential Pruden-tial Bache Securities, the firm chosen by the board to put the' financial package together. Pehrson explained that the 1982 - bonds were issued when interest rates were above 10 percent. Since then, he said, the rates have dropped to 8.4 percent. As the interest rate drops, the value of the "refunding bonds" needed to replace the original debt goes up. At todays rates, the district would have to issue about $7.9 million in refunding bonds at 8.4 percent to replace the old debt of $7.1 million, he said. The difference between those two figures, about $800,000 at today's rates, must be approved by the voters. ' ' It should not affect your taxes at all, and may provide extra money for capital expenses," Pehrson said. He said this refinancing technique has been used by a number of localt agencies in the state, including the Park City Fire Protection District. Another Prudential Bache representative, repre-sentative, Michael Mace, told the board Tuesday that the board should act quickly because Congress is considering legislation ' that, could make the refinancing proposal less attractive. "The range of potential savings (to the district) could be as much as $250,000 if taken up front in the first year or as much as $1 million if taken later," Mace said. Support for the move came from board member Eugene Lambert. "This kind of savings could go a long way toward helping to pay off the math science wing," he said. |