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Bond adviser recommends prepaying 2024 series; board hears options to save roughly $4.4 million
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Summary
District bond advisers told the board the district had about $3.9 million of excess debt-service funds and recommended using them to prepay a portion of 2024 bonds, potentially saving taxpayers about $4.4 million; advisers also outlined refinancing and restructuring alternatives and new legislative reporting requirements.
Duncanville ISD bond advisers and the district’s finance team briefed trustees on April 20 about a proposed bond-prepayment plan that staff said could save taxpayers several million dollars.
Joshua McLaughlin of BOK told the board the district had roughly $3.9 million of excess debt‑service funds available and recommended prepaying a portion of the district’s 2024 bond series. McLaughlin said the district could redeem about $3.85 million and — based on investment rates as of April 7 shown in the presentation — save taxpayers “just under $4,400,000.” He described the recommendation as a near-term use of excess debt-service funds to reduce future interest costs.
McLaughlin and district staff walked trustees through alternatives, including reducing the I&S tax rate, posting a higher minimum tax rate and applying excess funds to prepay bonds as they did this year, or restructuring a portion of callable 2015 bonds to maximize new state funding assistance created in recent legislation. He described the mechanics and tradeoffs of each approach and flagged that the calculations depend on certified values and market conditions; the adviser noted a two‑week window to lock in prepayment pricing and that figures could change slightly before a final decision.
The presentation also summarized recent legislative changes that affect district decisions: new state guidance on homestead‑exemption‑related additional state aid and a legislative requirement (cited in the presentation as Senate Bill 1453) that the district publish a minimum I&S tax rate, the proposed rate and the purpose of any difference when setting the I&S tax rate. McLaughlin said the district would return in coming months with recommended parameters if trustees want to pursue refunding or restructuring options.
Trustees asked questions about current bond interest rates, fund balances and credit ratings; McLaughlin answered that the candidate 2024 bonds had roughly 4.125% coupons in the examples shown and that the district’s outstanding debt was presented in the packet. No formal board action was taken; the presentation was informational and staff said next steps would include timing a potential prepayment before June 30 if the board directs staff to pursue it.
