The Ira ISD board of trustees could see savings of more than $1.8 million if it decides to refinance the bonds used to pay for constructing the new school building.
Two financial firms presented information on current interest rates and bond refinancing during Tuesday’s board meeting, but no action was taken.
In 2013, voters in the Ira school district approved the $12.2 million bond issue to fund the construction project. In 2014, the board approved a 25-year bond note with a five-year callback. Of the $12.2 million, some $2.95 million in bonds were sold to residents within the school district. The interest rate on the bonds was set at 3.67 percent.
Jake Lawrence with Government Capital Securities and John Blackburn with Live Oak Public Finance both presented options for the board to consider. Both firms used an interest rate near 2.5 percent in determining the best options for refinancing.
Lawrence said the board could save $1.49 million over the 20-year span of the bond, which would be paid off in 2039.
“You could take at least five cents off your I&S (interest and sinking) rate this year,” he said if bonds were refinanced. The I&S rate is used by the district to pay off bond debt each year.
Blackburn presented three different options that would result in additional savings. The first option, similar to Government Capital’s presentation, used a 2.5 percent interest rate over 20 years with a savings of $1.52 million.
The second option would have a 2.4692 percent interest rate with the district paying off the bond through additional payments over 19 years. Blackburn said that would save the district $1.71 million over the life of the bonds.
The final option had the most savings. Blackburn said the district could pay off the bond over 18 years by making additional payments. That would lead to a savings of more than $1.8 million and may include an interest rate as low as 2.36 percent.
Both Lawrence and Blackburn used 10-year callbacks, but said that would be flexible. Superintendent Brian Patterson said with a wind and solar farm being planned in the area, the district may have extra money coming in through payment in lieu of taxes agreements.
If a five-year callback was used, the board could review refinancing options earlier due to extra funds, both Lawrence and Blackburn said.
Also on Tuesday, the board approved removing Marcia Womack from the bank signor cards and adding her front-office replacement, Keva Fowlkes. Womack recently resigned to accept a position with Snyder ISD.
The closed session listed on the agenda was not held Tuesday.
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