Posted by Kelly Lusk on 10/22/2020
October 22, 2020 – Relating to Bond Refinancing
Last week at the community pep rally we announced a few things that have created quite a stir in our community. We’ve had multiple questions so I thought it best that I set the record straight.
1. The Board has been working the last few months on refinancing the Bonds that were sold in 2013 and 2014 which were used to finance the construction of the new elementary school. The original debt was $9,935,000 to be paid off in 2044. The District had reduced that debt to $8,830,000 by the beginning of this fiscal year.
On October 13, we refinanced that debt by having a bond sale. We were able to lower the interest rate on the bonds from the original 4.32% to 2.25%. We rolled the closing costs into the new bonds so the District was not required to come up with any payments to refinance the bonds.
The payments on the original bonds sold in 2013 and 2014 were $580,000 a year. The lower interest rate gained through the bond sale will lower the bond payments an average of $53,000 a year while still paying off the bond in 2044. This will save the taxpayers of Tom Bean ISD $1,253,000 in interest payments over the course of repayment.
- In September, the District completed a Time Warrant loan transaction. The District took out a $1,000,000 loan for the following purposes: a. Build a new building at the entrance to the football stadium. The building will contain men’s and women’s restrooms for both home and visitor fans to replace our current outdated and non ADA compliant restrooms; a new concession stand which will be roomier and cleaner than our current concession stand, as well as speeding up service to our fans; along with a new ticket booth and a controlled entry way which will make it safer for our employees and fans. b. Construct sidewalks around the parking lot and stadium which will improve safety and foot traffic flow. c. Resurface the student parking lot, paint it and create handicap parking, which will increase parking capacity, improve safety and raise the parking lot to ADA compliance. d. Build a façade at the front entrance to the High School which will improve the aesthetics of the building while also providing some shade and cover for students while they wait to load school buses in the afternoon.
The time warrant loan is a 15-year loan at a 2.08% interest rate. It is a 15 year note that is callable at any time, which means the district can pay it off early with no penalty. Payments on the loan average $67,000 a year. Therefore, the District will not pay any more dollars in debt between now and 2044.
So, while it would be a stretch to say that the refinancing of the original bonds “paid” for these improvements, it would be factual to state that the refinancing of the bonds created the space in the budget to allow for the payment for these improvements without the budget taking a big hit each year, without the District assuming more long term debt and without raising the tax rate on our citizens.
We have already employed an architect who is developing a schematic design. We hope to go out for construction bids Christmas and begin turning dirt in the spring.
- The Board continues to work on a solution to the reconstruction of the track, the expansion of the west stadium bleachers to serve as the home side seating and the replacement of the bleachers in the HS gym which have become a safety hazard. While we know there are other facility needs, these are the needs that were mentioned at the community pep rally. We are hopeful that we can take advantage of historically low interest rates to finance these projects, but the Board has not made a final commitment to these at this time.
If you have questions related to these topics, please feel free to call me at the administration building at any time.