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The district still owes $6,105,000 in principal on the bonds, which are from the middle school addition and elementary remodeling project in the early 1990s. The district's first chance to pay off these bonds comes in February 2002, and with interest rates lower now than when the bonds were originally issued the district will save money by refinancing at lower rates.

The winning bidder (out of five) was Griffin, Kubik, Stephens & Thompson, Inc., of Chicago, Ill. They offered interest rates between 4.0 and 4.6 percent that totalled a true interest rate of 4.3947 percent. The original bonds had interest rates between 4.7 and 5.7 percent for the remaining 15 years.

The financial crisis following the recent terrorist attacks made for ideal bond bidding conditions, said Carolyn Drude, an executive vice president with Ehlers and Associates, the district's financial consultants. "This has been a wonderful market last week and this week," explained Drude. "Not a lot of bond issues, and probably a lot of people thinking municipal bonds are a pretty good option."

The school district will pay nearly $100,000 from its debt service account up front as part of the band reissue. But over the remaining 15 years of the bonds (which last until 2017) the district will recover that initial outlay and save district taxpayers $707,000.

School districts, including District #741, generally have balances in their debt service accounts because, by law, they are required to levy for more than their obligations each year. These funds, though, face restrictions for spending.

Several districts tried to get legislative approval to transfer funds from debt service accounts to ailing general fund accounts last spring but failed to get the necessary legislative approval.

The $700,000 that the district saves will benefit taxpayers through a reduction of the debt service levy over the next 15 years, saving taxpayers about $55,000 per year.

The issue for the auditorium and fitness center, which taxpayers will start seeing on their taxes in 2002, will raise the debt service levy about $125,000 per year. The net effect of the savings and that additional levy will be about a $75,000 increase in the debt service levy for each of the next 15 years.

The state, which pays for part of the district's debt retirement, will also benefit from the refinancing. The state pays about 25 percent of the 1993 issue, so it will see savings beyond the $700,000 savings to the school district.