RIHEBC In The News: Low rate, big savings – Warwick Beacon

Three quarters of a percentage point doesn’t sound like much until it is applied to millions of dollars and a 20-year repayment schedule.

In his five-year forecast issued in July, City Finance Director Peder Schaefer applied a 4.5% interest rate on school bonds including the $350 million bond to build new Pilgrim and Toll Gate High Schools. Following the sale of $45 million in school bonds last week, of which $27 million will go toward paying for design and engineering costs of the new schools, Schaefer may need to revise his forecasts. The remaining $18 million is to be spent on ongoing renovation elementary and middle school projects.

Five institutions bid on the bonds that were sold through the Rhode Island Health and Education Building Corporation (RIHEBC) in order for the city to be eligible for state reimbursement. Bids ranged from a high of 3.898002% made by Janney Montgomery Scott LLC to a low of 3.813670% from KeyBanc Capital Markets.

The difference between the 4.5% projection made in the five-year forecast and what the bond sold for amounts to a reduction in costs to the city of $700,000 to $800,000 in interest payments a year for 20 years, Mayor Frank Picozzi said Monday.

Click here to read the full article, which appeared in the August 22, 2024 edition of the Warwick Beacon.