Financial advisers outline refinancing to protect levy rate and create replacement-bond capacity
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
Piper Sandler advised the board on taxable advance refunding scenarios for Centennial's 2020 bonds that could produce cash savings (estimated $1.4M to $2.8M in scenarios) and create capacity for a $14M—24M replacement bond when layered with a state matching grant of $10.2M.
Centennial School District financial advisers presented options for refunding a portion of the district's 2020 general-obligation bonds to preserve the communicated $1.19 levy-rate space and create capacity for a smaller replacement bond.
David Williams, director in Piper Sandler's public finance group, said the district's assessed-value growth has created a window of capacity that can be used to refinance some long-term maturities now and "layer some additional capital funding" ahead of a planned community conversation. Williams walked through a short taxable advance refunding that would accelerate repayment of some 2050 maturities and showed trade-offs between net present value and cash savings.
"You save all of that little bit all the way along and then this chunk at the very end, bring it up to the next 2 years and pay it off," Williams said, explaining the mechanics. In a two- or three-year fill-in scenario Williams showed cash savings rising from roughly $1.4 million (short refunding) to about $2.8 million in an extended scenario while net-present-value impacts improve with added par amount.
Paul Sotherton, the district's director of business operations, confirmed state grant eligibility the district may layer onto any new bond: "You'd be eligible for up to $10,200,000" in the current biennium, he said. Using conservative assumptions, Williams' illustrative capacity estimates produced roughly $14 million of new-money project funds over a 10-year levy profile and under $24 million over a 20-year profile when paired with the state match.
Board members asked about timing and risk. Williams warned that the district must plan authorization and bond timing carefully to avoid a projected mill-rate drop in fiscal 2028 and recommended authorizing refunding work by February or early March if the board wants to avoid that drop. He emphasized this is informational; no bond action was requested tonight.
Why it matters: Refinancing can lower total interest paid and create a smaller "replacement" bond that leverages state matching funds, while preserving the levy-rate message the district presented to voters in 2020. Board leadership said the information informs facility and financial planning ahead of any formal bond decisions.
Next steps: District staff and advisers will socialize the scenarios with the board, refine the assumptions, and return with recommendations and potential authorizing language for future board consideration.