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Alice ISD board adopts parameters order to enable refunding of 2016 unlimited-tax bonds
Summary
The Alice ISD board on Nov. 17 approved a parameters order allowing the superintendent and CFO to issue refunding bonds if market conditions meet preset metrics, with staff targeting refunding of roughly $6.27 million of 2016 maturities to achieve net present value savings.
The Alice Independent School District board on Monday adopted a parameters order authorizing district officials to execute a refunding of a portion of the district's outstanding unlimited-tax refunding bonds if market conditions meet financial targets.
Thomas Straps of Bridal Financial Consulting told trustees the district could consider refunding about $6,270,000 of 2016 maturities due 2028–2033 and that current market assumptions yield projected net present value (NPV) savings of roughly $115,895, or about 3.44 percent. "We're looking at refunding an amount of 6,270,000.00," Straps said during his presentation, noting the savings projection was run on Nov. 12 and would change with market movement.
The parameters order sets the district's execution thresholds: at least 3 percent NPV savings on a percentage basis and, ideally, net savings at least double the anticipated cost of issuance. Straps said a roughly 30-basis-point improvement in market rates would push projected NPV savings closer to 5 percent and increase dollar savings to more than $300,000, which would meet the board's two-times cost-of-issuance target.
Board members discussed timing and authority; the order delegates execution authority to the superintendent and the district's chief financial officer so the district can act quickly when market windows open, rather than waiting for a scheduled board meeting. Straps emphasized the parameters order is a guardrail: the district will not proceed unless the transaction meets the established metrics.
Adopting the order begins a process that could include submitting a permanent school fund application to the Texas Education Agency for the PSF guarantee, securing a rating and marketing the refunding to investors. Straps outlined a preliminary timetable that could see pricing in January and closing in February if the metrics and other approvals align.
The board's vote to adopt the parameters order cleared the way for staff to continue monitoring the market and to act within the approved guardrails if doing so would generate measurable savings for taxpayers.
