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Alice ISD reviews plan to refund 2016 bonds, projects three‑percent NPV savings
Summary
A financial advisor told the board the district could refund $6.27 million of 2016 unlimited‑tax bonds and currently projects net present value savings of about $115,895 (3.44%), but staff said additional market movement is required to meet internal cost‑of‑issuance thresholds.
Thomas Straps, a financial consultant, presented a preliminary plan for an unlimited‑tax refunding of portions of Alice ISD's outstanding bonds and answered trustees' questions on Nov. 17.
Straps said the district has four series of bonds outstanding totaling about $60,280,000 and proposed refunding $6,270,000 of the 2016 series representing maturities in 2028–2033. "We're looking at refunding an amount of 6,270,000.00... the current projected NPV savings, a $115,895 or about 3.44%," Straps said.
He explained the district's parameters order would set execution thresholds—at least 3% net present value savings and a requirement that savings be at least double the total cost of issuance. Straps said the district currently meets the 3% NPV threshold but not the two‑times cost‑of‑issuance test based on a projected COI of roughly $150,000. He said market movement of approximately 30 basis points could meet the two‑times COI threshold and improve projected dollar savings.
If the board adopts the parameters order (which it did on a motion), the order would delegate authority to the superintendent and chief financial officer to proceed when the financial metrics are met; the authorization would remain in force for six months while staff monitors markets. Straps outlined a preliminary timetable that included submitting the Permanent School Fund guarantee application to the Texas Education Agency, a preliminary pricing target in mid‑January and a potential closing in February, subject to market conditions.
The presentation emphasized that all figures were preliminary and contingent on market rates; final terms will be presented to the board after pricing.
