Centennial SD moves to refinance 2017 bonds; board to consider authorization in June

Centennial SD’s finance advisers told the school board they plan to pursue a refinancing of the district’s 2017 bond series and lay groundwork for a 2018 refinancing, saying the transactions could lower the district’s debt service by roughly $40,000–$50,000 a year and about $600,000 in total under conservative market assumptions.

The advisers said the district would only execute any refinancing if it met board-approved minimum-savings parameters. Garrett Moore, a financial adviser with PFM, and Tim Care, an underwriter with PNC, presented the timetable and savings outlook and said state and federal market developments could increase or reduce the final savings.

The plan matters because the district’s 2017 bonds (series A, B and D) have call dates later this year and refinancing them at lower interest rates would reduce the district’s recurring debt-service costs without extending principal. Moore said the refinancing under discussion would not restructure maturities, extend terms or require district cash contributions; it would move existing debt from higher rates to lower rates.

The financing team outlined a proposed schedule: the board would be asked to authorize the team to proceed with drafting documents at the June 12 finance committee meeting; the board would be presented with parameters resolutions (including maximum principal amounts and a minimum-savings test) at a committee-of-the-whole meeting in late June; the advisers would pursue a mid‑August pricing if authorized; and settlement would follow roughly a month later. For the 2018 series the team proposed presenting parameters now and pricing in early 2026, with settlement timed to comply with call-date restrictions.

Moore and Care said the current conservative estimate of total savings from the 2017 refinancing is about $600,000, which they characterized as conservative because rates could move favorably before pricing and increase savings toward $700,000–$900,000. They estimated the likely long‑term interest-rate assumptions being used in the materials are in the roughly 4.25%–4.5% range today. Moore said the district’s outstanding debt is relatively short‑dated — fully paid off in about 13 years — which keeps refinancing terms in a range that tends to offer better rates than longer maturities.

Advisers also described procedural and legal limits that shape timing. They said federal statutes limit settlement on advance refundings to no earlier than 90 days before the bonds’ call dates, which constrains when the district can settle on a 2018 refunding. Advisers recommended that the board include a minimum savings requirement in the parameters resolution so staff and the financing team will not move forward unless those savings tests are met.

Board members asked how the paydown of the 2017 series C (which will be paid off soon) will affect the budget and were told the reduction relative to total outstanding debt is modest and that the district uses a debt‑service fund to smooth annual budget effects. No formal authorization was taken during the meeting; staff said a motion seeking “authorization to proceed” would be on the finance committee agenda in June.

If the board votes in June to authorize the financing team to proceed, the team will return with the formal parameter resolutions and a preliminary official statement; any final decision to price and sell bonds would be subject to the minimum-savings tests and board approval of the sale documents.