Falls readies to pay down debt, save $230K in interest

Menomonee Falls - District officials in Menomonee Falls will soon approve a measure to let some air out of the debt balloon looming in 2015. As part of the levy approved in October, an extra $1.5 million was added to help pay down a $3.1 million dollar balloon debt payment the district owes in three years.

Paying now rather than later will save the district about $230,000 in interest and Business Director Jeff Gross said he believes there may be room in the 2012-13 budget to pay down the debt even further.

The revenue limits set by the state which prevented school districts from raising taxes despite falling state aid do not apply to this kind of levying. Part of the reason is for situations like this where a district saves money in the future by paying off debt, Gross said.

School districts are allowed to borrow 10 percent of their equalized value, meaning Menomonee Falls could borrow up to $350 million. Instead, the district only has about $30 million, or less than 1 percent, in outstanding debt.

Gross says the district is always looking at those debts to try and find opportunities to refinance and save money given the low interest rates currently being offered by lenders. Much of the rest of the debt left, he says, has a call date too far in the future to glean much savings for the district through refinancing.

The board will officially allocate this money at the Feb. 27 meeting, although the board was aware in October how this money would be used.