COPPERAS COVE — The Copperas Cove Independent School District board on Tuesday approved measures to save more than $1 million in the next 3½ years by renegotiating existing financial agreements.
Board members approved a refinancing plan on outstanding “series 2005” bonds that were approved by voters for $32.57 million. The refinancing, once finalized, is estimated to save about $500,000 over the next three years.
The bonds were issued for several reasons. A portion of them were used to refund $13.6 million in bonds issued in 1997 and the remaining balance was used to address Americans with Disabilities Act upgrades, safety upgrades, expansion, maintenance upgrades and maximizing facility usage for several of the district’s schools, said Glenn Graham, Cove ISD’s executive director of business services.
As of Aug. 31, Cove ISD paid off all but $11.7 million of the 2005 bonds’ total amount, Glenn said.
Part of the reason Cove ISD decided to refinance a portion of its debt, which totaled $27.8 million in August, was because its debt payments were to go up by an additional $20,000 each year until 2018.
Cove ISD has about $11.7 million left to pay on its “series 2005” bonds.
“Basically ... we’re refinancing that $11.7 million,” Graham said.
The bonds are at a 5 percent interest rate, but Cove ISD’s financial advisers believe they will be able to refinance for a 2 percent interest rate, Glenn said.
“We’ll be saving interest payment on the bonds. It’s no different than refinancing your house,” he said. “The interest rates are much lower now, but we won’t know exactly what they’ll be until we sell the bonds in May.”
New electric provider
Cove ISD also will switch its electric provider after ending a four-year cooperative contract with the Texas Association of School Boards.
MP2 Energy, a power company based in The Woodlands, will provide electricity to the district on a fixed-rate of about 4.5 cents per kilowatt-hour for 42 months, Graham said. The district signed a contract with the company Wednesday, he added.
The change will save Cove ISD a projected $167,000 annually if they continue to use about 8 million kwh per year.
“The opportunity just presents itself because the electricity rates are tied into natural gas rates, and natural gas is selling at an all-time low in the last 50 years,” Graham said. “We’ve just been kind of lucky to get into contract and utilize those lower rates.”
Since some portions of a public school district’s funding and expenses are out of its control, he said saving every little bit counts.
“We’re always looking at ways we can reduce our costs. Unfortunately for school districts, we are kind of hemmed into what we can do,” he said. “So we really need to be as proactive as we can to save money.”