MARTINSBURG, W.Va. — Thanks to a lower interest rate, the Berkeley County school system is expected to save more than $1 million over the next five years through $11.5 million in new bonds for a school construction and renovation plan that voters approved in 2001.
The bonds issued Thursday via United Bank Inc. replace old bonds that were issued in 2002, Berkeley County schools Treasurer Jim Butts said.
Voters in 2001 approved a $27.8 million bond issue to build a new middle school at Spring Mills, a new intermediate school in Gerrardstown, and multiple renovations and additions at seven other existing schools.
The $1,041,690.86 in savings netted by "refunding" the old bonds must be used for building projects at any of the nine schools, Butts said. The investors who purchased the old bonds will be paid off later this year, he said.
The new bonds are scheduled to be paid off in five years, but the school district netted a lower interest rate, Butts said.
The financial maneuvering will not change what taxpayers see on their tax bills, but county Schools Superintendent Manny P. Arvon II said the additional money will help the school district’s budget.
"School districts aren't any different than any agency or corporation," Arvon said. “The economy is bad, and everybody is struggling.”
The school board Monday gave final approval to the possible issuance of the bonds with the condition that interest rates proved to be viable.
Arvon said he was particularly pleased that that the school district was in the position to refinance the 2002 bonds and even more excited about the school district’s credit rating.
The school district’s "AA Stable" rating from Standard & Poor's made the bond issue "highly desirable" to investors, according to Butts.
"Everything just fell into place ...," Arvon said.
School officials have yet to decide what construction projects will be undertaken with the additional funding, which Arvon said would be available this year.
Aside from the two new schools financed through the 2001 bond issue, additions and renovations were completed at Bunker Hill, Hedgesville and Back Creek elementary schools, Martinsburg and Hedgesville high schools, Martinsburg South Middle School and Mill Creek Intermediate School, according to school officials.
The school district used the voter-approved bond issue in 2002 to apply for state funding for the nine projects from the West Virginia School Building Authority.
Arvon said the nine projects are among more than 30 that the school district has undertaken in about 15 years as part of what he described as an “aggressive” building program.
The school district currently is building a new high school in Spring Mills and moving forward with plans to build a new middle school in Gerrardstown as part of school construction plan that voters approved in 2009.