The Ottawa school district expects to save a little more than $1 million by refinancing a large chunk of its 2005 series general obligation bonds.

The district plans to refinance $12.205 million in bonds from the current interest rate of 4.39 percent to a new rate of about 2 percent. The district intends to lock in the new interest rate today, Dean Katt, Ottawa superintendent, said. The Ottawa school board is expected to pass the bond resolution to finalize the deal at its Dec. 10 meeting.

The refinancing is expected to save the district about $1.020 million, investment banking group Pipar Jarray, the school district’s bond adviser based in Leawood, estimated.

“Interest rates are at historic lows,” Katt said, adding that refinancing the bonds would represent a significant savings to the district over the life of the bonds. The bonds are set to begin maturing in 2015, with the final bond maturing Sept. 1, 2025, Teri George, the school district’s finance director and treasurer, said. The district plans to stick to the same repayment schedule, rather than accelerating the payments, to keep the mill levy consistent, she said.

The 2005 bonds were issued to pay for the acquisition of a building site and to construct, equip and furnish Lincoln Elementary School, 1102 N. Milner Road, Ottawa, school officials said previously. The bonds also were used to repair, remodel and construct an addition to Garfield Elementary School, 1213 S. College St., Ottawa, to improve the heating and cooling system and construct an addition to Ottawa High School, 1120 S. Ash St., Ottawa, and to equip and improve technological systems through the school district.

The Ottawa school district saved nearly $900,000 by refinancing another portion of its 2005 series general obligation bonds earlier this year in March. Greg Vahrenberg, managing director of Piper Jaffray’s Leawood office, told the school board in March that refinancing the $8.545 million in bonds from the current interest rate of 4.39 percent to the new rate of 2.19 percent would save the district $883,117.36.

When combined, the pair of moves to refinance more than $20.7 million in 2005 series general obligation bonds would save the district nearly $2 million, George said.

About $1 million in 2005 series general obligation bonds have yet to be refinanced, George said. Those bonds mature between 2020 and 2023.

“Those bonds could be refinanced at a later date,” she said.

Doug Carder is senior writer for The Herald. Email him at dcarder@ottawaherald.com