CLEVELAND (AP) Refinancing the city school district’s $120 million of construction debt could save taxpayers up to $9.2 million over 20 years, the schools’ top executive said.
But the refinancing to get a better interest rate could cost approximately $1 million in banking and lawyer fees.
Fifth Third Bank and co-adviser SBK Brooks Inc. together have earned approximately $230,000 from the Cleveland schools since 2002, when the district began selling bonds to finance its school building and renovation project. Cleveland voters approved the issuance of approximately $335 million in bonds as the local share for construction, with twice that amount to come from the state.
Fifth Third Bank has been the district’s financial adviser the past five years.
New Cleveland schools Chief Executive Eugene Sanders was a member of the board of directors for a Fifth Third Bank subsidiary when he was superintendent of the Toledo schools.
Refinancing could save approximately $1.45 a year for a taxpayer paying a school tax based on a $100,000 home.
“We’re looking for the best deal for the taxpayers,” said James Fortlage, the chief financial officer of Cleveland schools. He said negotiating the refinancing with a lender gives the district flexibility to lock in a favorable interest rate.
Fortlage said the proposed refinancing could be reviewed by the Bond Accountability Commission, an independent body watching over the construction project.