On The Record
On March 11, Washtenaw Community College closed a deal to refinance its two outstanding bonds at a significant savings to the college.
“It’s outstanding news,” said Chief Financial Officer William Johnson, vice president of administration and finance. “We are going to save the college more than $1.5 million over the remaining maturity schedule on these two bonds.”
The bonds to which Johnson refers are a 2005 issue earmarked for general campus maintenance and improvements, and a 2006 issue that financed the construction of the college’s popular Health & Fitness Center, which opened in 2007. Combined they total $12.7 million in outstanding dollars. The process began in November 2014 when financial indicators suggested that interest rates would begin to rise in early 2015. WCC Trustees authorized the bond refinancing, also referred to as refunding, at a special meeting in December to start the ball rolling.
“The process to refund bonds takes time, and fortunately for us it worked in our favor. Interest rates actually declined to a historic low by the time we locked them in, so we saved roughly $300,000 more than we anticipated. The savings for the college is roughly $100,000 per year,” said Johnson.
Long-term stream of savings
“As a trustee, I am anxious to support financial management strategies, such as bond refinancing, that free up dollars to offset other operating expenses and indirectly reduce our dependence on tuition revenue,” said Pam Horiszny, treasurer of the WCC Board of Trustees. “Both current and future students will benefit from this long-term stream of savings.”