• November 23, 2014

Belton ISD seeks $1.3 million savings in bond refinance

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Posted: Tuesday, February 25, 2014 4:30 am

BELTON — The Belton Independent School District’s board of trustees authorized Superintendent Susan Kincannon to refinance 2006 bonds that could save the district an estimated $1.3 million in interest payments, or $110,000.

“Every time we have the opportunity to save the district money, we certainly look at doing that,” said Jennifer Douglas, managing director of Specialized Public Finance, a financial advisory service for government entities.

“The 2006 bonds are currently paying a 4.5 to 5 percent interest rate. In today’s market, the true interest cost is just under 2.15 percent.

“This is no different from homeowners refinancing a mortgage when the interest rates drop down.”

No penalty

School districts can refinance the bonds after 10 years at no penalty.

The result should be a 12.7 percent savings for the district.

The cost of issuance to refinance will be about $92,000.

“We strive to be good stewards of taxpayer dollars, and this is one of the ways we do that,” said school board President Randy Pittenger. “$100,000 savings per year is significant.”

Roadmap presentation

The board also continued looking toward addressing future growth with its Belton ISD Roadmap to 2025 presentation.

Douglas and Glenn Opel, a public finance partner with Bracewell and Giuliani of Austin, who serves as bond counsel for Belton ISD, talked about upcoming bond capacity, debt and tax rates.

Kincannon gave an overview of the last four bond elections. The 2004 bond paid for multiple renovations throughout the district, including at Belton High School. The 2006 bond funded construction of the district’s swim center and Tarver Elementary.

2010’s bond paid for South Belton Middle School, while the 2012 bond funded construction of North Belton Middle School, High Point Elementary and Chisholm Trail Elementary.

“Since 2010, we have refinanced bonds four times, saving the district $5.1 million,” Kincannon said.

In looking to the future, the first question district leaders will ask is how much money the district can afford to borrow in its next bond election.

The board has discussed the possibility of opening a second comprehensive high school by 2019 or 2021, and would finance the construction via a bond election.

Districts are allowed a maximum of a 50-cent tax rate in the interest and sinking fund portion of the budget, or debt funding.

Belton ISD’s I&S tax rate is currently 28 cents.

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