TEMPLE, Texas — The Temple Independent School District announced it will save more than $400,000 over the next five years after the district was able to refund bonds from 2012 this week.
The district said it was able to refund $7.6 million of the remaining principal at an interest rate of 0.713%. That will result in an estimated savings of $416,000 over the five years remaining before the bonds retire in 2027.
That means the district will save an aver of $82,700 per year in annual debt service payments beginning in fiscal year 2023.
“A bond refunding gives us the ability to restructure bond debt. It is very similar to refinancing a mortgage on a house with a few exceptions,” said Kent Boyd, assistant superintendent of finance and operations for TISD. “Schools districts must wait a predetermined amount of time before the bonds are callable, which is another way of saying eligible to refund."
The bonds refunded were originally sold in 2012 and become callable on Feb. 1, 2022. During the board's July meeting, trustees authorized district administrators to refund the bonds subject to a savings of at least 3%.
The bonds were originally sold to fund capital projects within the district and interest rates ranged from 2 to 3% at the time of the sale. Dropping the rate to 0.713% means the district will save taxpayers about 0.2 cents annually on the I&S tax rate, effective with the 2022 tax rate adoption.
“TISD has the responsibility to be diligent stewards of taxpayer dollars,” said Dr. Bobby Ott, superintendent of Temple schools. “This is a responsibility we take very seriously, as evident by lowering the tax rate 16.5 cents over the last three years.”
The actual savings should amount to 5.279%, well above the 3% threshold set by the board and the total savings are nearly $11,000 higher than originally estimated when the refunding was first approved in July, the district said.