In a meeting Monday, a representative from Southwest Securities, the district’s financial advisors, told the board of trustees that interest rates are currently so low that refinancing the bond could bring the rate down from 4.36 to 2.07 percent.
Dr. Linda Sue Thomas, superintendent, said that the amount left on the bond is $3,580,000.
“By lowering the interest rate, we should save $143,859,” said Dr. Thomas. “We will save the district money by refunding.”
“We are switching the high interest rate for a lower interest rate, therefore it reduces the interest cost by $15,984 per year,” Linda O’Connell, Beeville ISD director of finance, said.
O’Connell said she asked Southwest Securities to notify her when they see an opportunity for the district to save money.
In this case, to consider refunding a bond, there had to be a savings ratio of more than three percent. She thought refunding the bond would be beneficial for the entire community.
“This is being a good steward to taxpayers’ money,” said O’Connell. “This is why we pursue refinancing anytime we have an opportunity.”
Southwest Securities said it would be a few more weeks until the paperwork would be ready. The board agreed to go ahead with the action if the interest rates remain favorable at that time. The trustees gave Dr. Thomas the authority to give the final approval.
“This meeting did not lock in the interest rate,” Dr. Thomas said. “We’ll do it if it still looks good.”
Sarah Taylor is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 122, or email@example.com.