Interest Rate Reduction on Assumed Amortizations for Building Aid Purposes
SED recently posted guidance on the interest rate reduction for assumed amortization for retrospective and prospective projects that began in 2007-08 or earlier and impact 2017-18 Building Aid which can be found using the following link: https://stateaid.nysed.gov/build/html_docs/combined_overview_and_waiver_document.htm.
New assumed amortization for the remaining life of the retro bond or prospective project will be established based on the new interest rate and the new rate will be applied going forward. A waiver from the interest rate reduction may be granted by the State Aid Office for districts able to demonstrate that they are precluded by state or federal law, rule or regulation from refinancing the bond currently financing the impacted project(s). Districts with projects subject to the rate reduction must complete the current year SAMS Form FB Interest Rate Reduction Waiver Application (IRRWA) form as part of their State Aid claim in order to avoid inaccurate Building Aid calculations.
Note: Per SED, this recent guidance supersedes all previously published information regarding the interest rate reduction.
Statewide Interest Rate for Assumed Amortizations of Transportation Capital Expenses for the 2017-18 Aid Year
SED has posted the calculated statewide average interest rate based on bus borrowings between 7/1/16 and 6/30/17 which is at 1.500%. This information can be found using the following link: https://stateaid.nysed.gov/trans/trans_intrate_annc.htm. Be certain to note, this interest rate will be permanently applied to all assumed amortizations of transportation capital expense beginning in the 2017-18 aid year. The rate will also be the preliminary rate applied to amortizations beginning in the 2018-19 aid year, until a permanent rate based on borrowings between 7/1/17 and 6/30/18 is established in fall 2018.
Please use the following link to review the mathematical explanation of this interest rate calculation: https://stateaid.nysed.gov/trans/transcap_int_rate_calc.htm.
