By Donald Wittkowski
Ocean City taxpayers will save more than $1 million under a bond refunding package approved Wednesday night by the Board of Education.
By a 10-0 vote, the board authorized about $11.7 million in new bonds to replace higher interest debt issued in 2005 to finance the construction of Ocean City High School.
The new bonds carry an interest rate of between 2 percent and 3 percent compared to 4 percent to 5 percent under the old debt.
The lower interest costs will save the school district and local taxpayers between $150,000 and $175,000 annually over the next seven years for a total of more than $1 million, Business Administrator Tim Kelley said.
"It's not a humongous savings, but a savings nonetheless that we're going to give to taxpayers," Kelley told reporters after the board meeting.
The refunding is expected to reduce the tax rate on the school district's debt service by two-tenths of a cent. That will translate into a savings of about $10 per year for the owner of the typical Ocean City home assessed at $500,000, Kelley said.
Ocean City's school district is simply following the same strategy as myriad homeowners nationwide who have refinanced their mortgages in recent years to capitalize on historically low interest rates.
