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Posted on Thu, Mar 22, 2012 : 5:57 a.m.

Refinancing of Skyline High School bond to save Ann Arbor schools taxpayers $7.3M

By Danielle Arndt

The Ann Arbor Board of Education has authorized administrators to move forward with a bond refinancing that will result in a slight savings to the average taxpayer.

The $123.4-million bond that voters approved in 2004 primarily served to fund the construction of Skyline High School. It also funded various remodeling and capital improvement projects at other buildings.

Superintendent Patricia Green said the current market is very favorable for refinancing; interest rates are low.

She described refinancing a bond as similar to refinancing a mortgage on your home. But in the district’s case, because the bonds are payable through a debt millage, the savings would be to taxpayers of the district, not the district’s general fund.

Refinancing now could save Ann Arbor Public Schools residents a collective $7.3 million in property taxes over the life of the bonds. The bonds will expire in 2029, said Nancy Hoover, director of financial operations for AAPS.

Deputy Superintendent for Operations Robert Allen said the district will need to move forward with the refinancing quickly, considering the market already has shifted since March 16, which is when administrators began drafting their initial refinancing recommendation. At that point, taxpayers were projected to see a savings of $8.7 million.

In just one week, the market changed, Allen said, reducing taxpayers’ savings by $1.4 million.

Although called a “refund,” taxpayers would not actually receive a check in the mail with money back. Instead, the mills being levied for the debt retirement would be reduced by 0.05 to 0.07 mills, Allen said. That equates to a savings of $5 to $7 per year for a family with a $100,000 home.

“Although it’s good to be reducing the millage, I would caution our (taxpayers) not to spend it all in one place,” Trustee Andy Thomas said sarcastically.

The district will refinance an amount not to exceed $119 million. Allen explained this is because since 2004, the district has paid down some its principal and it is estimated Ann Arbor has just under $119 million in principal remaining.

Other parameters included in the refinancing agreement approved Wednesday were: 1) the true interest cost of the bonds is not to exceed 3.5 percent; and 2) the net, present value savings from the refunding must be a least 5 percent of the principal amount of the bonds to be refunded.

The Board of Education approved nearly the exact same agreement in 2007. However, before the refinancing process could be completed, the market shifted and the savings to taxpayers shrunk. Thus, the district did not go through with the refinancing, Allen said.

Staff reporter Danielle Arndt covers K-12 education for Follow her on Twitter @DanielleArndt or email her at


Wendy Piotrowski

Thu, Mar 22, 2012 : 7:05 p.m.

They need to take care of teacher's who bully students first. That is the reason my family is leaving this city. It has the worst schools by far.

Dog Guy

Thu, Mar 22, 2012 : 1:43 p.m.

Not building this unneeded school would have saved us $200 million. "If you build it they will come" is not vision, but incantation. The underground parking garage will need the magic of closing some more aboveground parking for success. Much has already been spent on a new station to conjure trains out of thin air. Playing the empty buses card will vanquish the evil automobile. AAPS, DDA, and A2gov are playing fantasy games rather than operating in an actuality where there are present needs.


Thu, Mar 22, 2012 : 1:11 p.m.

This is what we would expect the board to do......only earlier............


Thu, Mar 22, 2012 : 1:09 p.m.

Was the technology millage included in this bond? Is this the same technology that the school board has put onto the May election?


Thu, Mar 22, 2012 : 5:18 p.m.

The computers they want to replace were paid for with this bond, which the taxpayers will be paying until 2029. Of course the new technology bond millage will take years more to pay for than the technology will last. So when this one is done, we will have another and another, and eventually we will be paying for 3 or 4 or 5 generations of technology that has been trashed. Excellent use of long-term funds!

Danielle Arndt

Thu, Mar 22, 2012 : 2:03 p.m.

dougfroma2, $20 million in the 2004 bond went toward technology. However, the $45.8M bond that is on the ballot this coming May is a separate/new bond. This previous story explains a little more: Thank you for reading and for your question!

Les Gov

Thu, Mar 22, 2012 : 11:32 a.m.

You are right DonBee....someone was asleep at the switch....this should have been done long ago. As the article stated by not doing this sooner the Board cost the Taxpayers $1.4 million..... Deals like this go through Investment Bankers who take a cut of the proceeds...just wait until the Ann Arbor taxpayers find out that this deal is going to add to the profits of the big banks.


Thu, Mar 22, 2012 : 11:20 a.m.

The market has been favorable for over a year, one has to wonder what took them so long.


Thu, Mar 22, 2012 : 1:43 p.m.

Good P.R. before the technology millage vote coming up? "See....we're responsible with your money..."