Low interest rates and premium paid on bond sale will reduce the tax impact of the East Grand Forks Senior High school renovation and addition construction for taxpayers in the East Grand Forks Public Schools.
In December, the school board approved the sale of general obligation school building bonds. Bonds with a principal amount of 19.1million sold on January 20, 2016 at 2.76 percent interest, in part because of the district’s A= rating from Standard and Poor’s. Four bids were received, and the school board accepted the low bid from Raymond James & Associates Inc. St. Petersburg, Florida.
Elher’s and Associates used a conservative 3.97 interest rate for estimates prior to the district’s November 3 bond election. Those estimates called for taxes to increase $142 annually on a home valued at $150,000.
In December, interests rates had come down and potential investors began paying premiums on bond sales. Premiums paid on bond sales would require less borrowing for the school district.
The tax impact for taxes payable in 2016, which was set in December based on estimates, will be less that the estimates provided prior to the November 2015 election. A home valued at $ 150,000 will see an election of $ 127, a decrease of $15 for taxes payable 2016.
The tax impact for 2017 decreases further as a result of the low interest rate and less borrowing. A home valued at $150,000 will see and increase of only $114 annually, a reduction of $28 less than estimates prior to the November election.
For taxes payable in 2017, non-homestead agricultural land valued at $5,000 and acre will see an increase of $ 4.53 an acre annually, a reduction of $ 1.08 per acre less than estimates prior to the election.Overall estimated savings for the life of the term of the bond repayment for ISD 595 taxpayers compared to November election estimates are $ 3.65 million.