Oct-05
24
Invest in Debt Reduction
By
I understand that the surplus generated just over $250,000 in revenue last year. Not bad, but wouldn’t $745,350 be much better? That is the interest paid this year (2005) on the outstanding bonds issues back in 1997 (current outstanding of $13,100,000.00). I would think that investing in debt reduction would be a wiser investment option.
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You might want to run the numbers on that suggestion. It may be that the interest income generated by the $250,000 is greater than the equivalent interest expense on the $250,000 portion of the $13.1 megabucks.
Our finance officer has been playing that game for years. Borrow from the state at approximately 2.0% and put it in the bank at higher than 2.0%. That low borrowing interest rate is only open to school districts–sorry.