SHARON School board refinances loan

SHARON, Pa. -- The city school district will save $252,920 in interest costs by refinancing a 1998 loan at a lower interest rate.
The school board approved the plan Thursday, voting to refinance $6,610,000 of a loan borrowed to help pay for renovation of some of its buildings.
The plan had been to refinance both the 1998 debt and an additional $8.8 million borrowed in 1999 for the same purpose. The board had hoped to realize an interest savings of about $441,000.
However, that proposal was scrapped after officials determined it wouldn't be feasible to refinance the 1999 debt at this time. The board can look at the 1999 debt again when short-term investment interest rates are better, officials said.
The proposal presented to the school board Thursday was different from what had been proposed last month but it is still very beneficial, said business manager James Wolf.
The 1998 loan was borrowed at an interest rate averaging between 4.8 percent and 5 percent; the new loan will be financed at an average interest rate of 3.91 percent.
That will reduce interest costs $252,920 over the life of the loan, which will be paid off in 2018.
Sharon won't get the interest savings in a lump sum up front but will see it spread out over 16 years of the bond issue, reducing the annual debt service by about $16,000 each year.