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.
The refunding plan Wednesday represented the second time the district has undertaken a refinancing on bonds that were issued to underwrite about $28 million in construction costs for the high school.
The first time occurred in 2005, when new bonds were floated to replace higher interest debt issued in 2002. Now, the 2005 series bonds are getting refunded with new debt at even lower interest rates
Combined savings from the two refinancings in 2005 and 2016 will amount to nearly $2 million over the life of the debt through 2022, according to Kelley.
In other business Wednesday night, the board honored the high school’s state championship Lady Red Raiders swimming team.
Ocean City defeated rival Chatham High School 86-84 last week for the State Group B title. The board meeting included video of the Lady Red Raiders winning the very last race to seal the championship.
“I knew how that turned out and I still have an anxiety attack,” School Superintendent Kathleen Taylor joked as the audience erupted in laughter.
Each member of the swim team received a red rose and the congratulations from Taylor and the Board of Education.
“The girls dominated this year. They finished their season 13-0,” Taylor said.
Swim Coach Steve Warrington recalled all of the excitement of the past season and expressed hope there will be even more championships to come.
“From Day 1, this was a talented team. I just enjoyed the ride,” Warrington said. “It was awesome.”