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For the second time this month, Middletown taxpayers got some good financial news from the city's school system.

Middletown school officials said Friday they will save $2.5 million during the next decade because of favorable re-financing of district bonds that resulted in a lower interest rate.

Earlier this month, district officials said their latest, five-year budget projections showed no need for a new school tax levy until after 2020 and reported the school system's bond rating had improved.

"Municipal bond issues have provisions that allow the issuer to refund or refinance the existing bonds and replace them with new refunding bonds," said Middletown Schools Treasurer Randy Bertram.

"The district has opted to refund and issue the bonds earlier than normal to take advantage of the current low interest rates for a taxable refunding issue," said Middletown Schools Treasurer Randy Bertram.

School districts use bonds to borrow money to pay for buildings and facilities.

If a bond levy is approved by voters, the district issues bonds. A bank or financial institution will sell and administer the bonds.

Betram said a bond is like a loan and taxpayers will pay back lenders or bond holders the principal and interest on the loan through the taxes paid to the school district.

Middletown's annual operating budget for the upcoming 2016-2017 school year is $71.3 million.

The $2.5 million in savings during the next 10 years will not result in any refunds to taxpayers but rather lower the overall operating expenses of the district.

The refinanced bonds, which were approved by voters in 2007, have helped pay for construction and building renovations for seven elementary schools and one sixth grade center learning center.

This summer construction will begin on a new Middletown Middle School and renovation of the adjacent high school. Both projects - which also are funded by state construction monies - were the result of voter approved bond levy in May 2014.

The city district is the second school system in Butler County this month to re-finance taxpayer approved bonds to save money via lower interest rates.

Officials with Lakota Local Schools said bond re-financing will save $900,000 from its operating budget this year.

Bertram said Middletown has "been working very hard over the last two years to improve the financial condition of the district while implementing internal controls to keep us on track."

Middletown Schools Superintendent Sam Ison said, "I pledged that I would be a good steward of our tax dollars, to the community and our tax payers, and this is one area we have ensured financial responsibility."