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Board votes to call 2015 bonds, approving payoff scenario to save interest
Summary
Lincoln County school board approved calling its 2015 bonds under a scenario that accelerates payoff by one year to capture an estimated $71,000 per year in interest savings and roughly $787,600 over the remaining term; finance staff recommended the move based on current SPLOST and bond balances.
The Lincoln County Board of Education approved a plan to call its 2015 bond series and accelerate payoff under a scenario recommended by finance staff to reduce interest costs.
Finance staff reviewed two scenarios from the district’s bond adviser that would call a portion of the series 2015 bonds now callable after April 1, 2025. The recommended option would pay down the principal sooner, producing an estimated decrease of about $71,000 in annual interest and roughly $787,600 in total savings over the remaining life of the bonds. Finance staff said the district currently holds about $3.1 million combined in bond and SPLOST accounts, and that SPLOST and bond receipts in the next two months should leave sufficient liquidity to proceed.
Mr. Norman described the two scenarios and recommended option one for the greater overall savings, noting the board must give bondholders 30 days’ notice to call the bonds. When asked about the risk of taking another bond in future years, staff said payments can be layered to avoid a sharp spike in annual debt service.
A motion to proceed with the recommended scenario was made by Mr. Hightower and seconded by Mr. Madison; the board approved the motion by voice vote. Board members discussed projected balances and the projected post-payment fund balance (staff estimated district reserves would be reduced but rebuild through SPLOST and bond receipts). The board directed staff to notify bondholders and coordinate with Raymond James on timing and implementation.
The decision reduces the district’s outstanding principal and is intended to lower long-term debt service costs; staff will provide follow-up numbers and timing to the board as they finalize the call.
