Abilene council authorizes up to $40 million in 2025 refunding bonds to lower interest costs
November 06, 2025 | Abilene, Taylor County, Texas
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Finance director Marjorie Knight told the council the ordinance authorizes the sale of refunding bonds with a principal amount not to exceed $40,000,000, a minimum net present value debt‑service savings of 6 percent, true interest cost not to exceed 5 percent and final maturity no later than February 2038. Knight estimated total savings from the transaction at about $3.9 million, with roughly $3 million of that tax‑supported and about $987,000 attributable to water and sewer debt. She said the refinance would likely yield annual savings in the range of $266,000 to $370,000 and tentative analysis projects the tax rate could decrease by about $0.0031 per $100 of assessed value.
George Williford of Hilltop Securities explained that 'refunding' is analogous to refinancing a mortgage when interest rates decline. He described the callable maturities available this year and a sensitivity analysis showing the minimum acceptable 6 percent present value savings threshold. Williford said timing depends on market conditions and that staff could delay pricing if market conditions were unfavorable.
Council members asked that staff provide a follow‑up report once the sale occurs so the public and council can see final savings and rates.
The ordinance was approved by council vote (motion by Councilman Espinosa, second by Councilman Beard).
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