Wenatchee School District Refinances 2014 Bonds, Saves Taxpayers $6.6 Million

The Wenatchee School District (WSD) has successfully refinanced the 2014 voter-approved bonds it used to build Lincoln and Washington Elementary Schools.

The move was finalized on Tuesday (March 5) after Moody's Investor Services, an independent third-party credit rating service, upheld the District's longstanding Aa3 credit rating.

NO IMPACT BROUGHT BY DISTRICT'S CURRENT FINANCIAL WOES

WSD spokesperson, Diana Haglund, says the district's credit rating was not impacted by its current financial issues, and that it was actually aided by the plan to resolve them.

"That was actually one of the reasons that Moody's specifically cited for the continuation of the district's favorable rate. It was because of the bold budget reduction strategy that the District is taking over the next year in order for us to balance our operational dollars and remain solvent."

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The credit analysis was required as part of the process to refinance the District's current bonds at a lower rate.

DISTRICT HOMEOWNERS WILL SEE SAVINGS ON THEIR PROPERTY TAX BILLS

The District has been actively monitoring bond market conditions, and low interest rates allowed the District to save $6.6 million over the next nine years.

Haglund says the savings will go directly back to taxpayers and cannot be used by the District.

"This is not money that will go back to the District. This will go directly back into taxpayer pockets. So this is a savings for taxpayers but they're not savings that will benefit the district in any way other than by creating space on the tax rolls for future bonds that the District might go out for and ask taxpayers to approve."

The savings mean a homeowner with an assessed value of $450,000 would save an average of $41.00 per year or $369 over the term of the refinanced bonds, which starts in 2025 and ends in 2033 when the bonds are paid in full.

DISTRICT'S BONDS PROVE ESPECIALLY APPEALING TO LOCAL INVESTORS

Aa3 is the fourth-highest credit rating possible within Moody's Long-term Corporate Obligation Rating structure.

Districts rated Aa3 are considered to be of high quality and pose a very low credit risk, which makes them appealing to investors.

Haglund says all of the District's bonds were sold within 25 minutes of hitting the open market, with most of them going to local investors, including Cashmere Valley Bank, whom she says was first in line to invest.