MFISD to hunt lower interest in refinancing of old bonds

By Emily Hilley-Sierzchula

The Marble Falls Independent School District (MFISD) Board of Trustees agreed during its meeting Monday, Jan. 19, meeting to refinance old bonds in order to take advantage of almost “rock-bottom” interest rates, according to board discussions with the accountant managing the district’s bonds.

Bond refinancing

After a presentation by Brian Grubbs, of SAMCO Capital Markets, Inc., the board voted unanimously to refinance $9 million of Series 2007A district bonds from a 4-5 percent interest rate to a lower rate of up to 3.78 percent.

“It’s a no-brainer,” said board president Rick Edwards, adding he would make the same decision if it were his own money.

The Bond Buyers Index of Municipal Bonds shows an interest rate this week of 3.42 percent.

Current rates are just above a historic low, Grubbs explained. Refinancing will not extend payments on the bond, he said, but could save the district as much as $800,000 over 22 years.

“It’s similar to re-financing a house,” Grubbs said. 

The company will be able to “lock in” a lowered interest rate next month.

Because MFISD has a favorable rating (AAA) through the Permanent School Fund Guarantee and a AA- rating from Standard & Poor’s, investors will be attracted to purchasing MFISD bonds, he said.

As part of its motion, the board also decided to keep bond commitments to $10 million or less each calendar year, which also helps interest rates.

“The savings could exceed what was communicated to the community during the bond election,” Grubbs said.

Superintendent

nets pay raise

During an executive session, which is closed to the public, “the board discussed and reviewed [MFISD Superintendent] Dr. Robert O’Connor’s evaluation, contract extension and compensation,” according to board briefs from the meeting. “They approved a one year contract extension, as well a raise.”

For more, see Friday's Highlander.