Argyle and Lake Dallas school districts are among latest school districts looking to save money by taking action to refinance a portion of bonds while interest rates are low.
Last week, Argyle school board members voted 6-0 to authorize district administrators and financial advisers to refinance bonds. Parameters of the refinance were not readily available, but Superintendent Telena Wright said the district looks to issue more than about $5.5 million in refunding bonds from its 2003 series and 2005 series.
Wright said the district projects savings of about $1.6 million over the next 27 years if the transaction takes place.
The district will look to make the transaction within the next couple weeks, she said.
On Nov. 19, the Lake Dallas school board approved parameters 7-0 to refund a maximum $10 million in bonds from its 2002 series and 2004 series, said Wes Eversole, the district’s deputy superintendent and chief financial officer.
The board required that the district must save at least $2 million, must not issue refunding bonds totaling more than $10 million, and must secure an interest rate not to exceed 3 percent. Under the parameters, the transaction must take place before May 15, he said.
If it does, the district will begin accruing savings for the 2013-14 school year, Eversole said.
The refinance would not affect the district’s debt service tax rate, he said.
Those bonds must mature by Feb. 15, 2037, Eversole said.
The Lake Dallas school district could see a savings of anywhere between $100,000 and $125,000 annually by refunding bonds, Eversole said.
“The market conditions are such where we feel like we can go out … and save taxpayers some money,” Eversole said. “We’re looking at historic lows as far as interest rates go right now. This is strictly a savings.”
Eversole said many districts are taking similar action because rates are so low.
“Those school districts that have debt that [is] refundable, they’re trying to take advantage of it and accrue the savings,” he said.
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