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District finance advisers recommend refinancing 2016 bonds to save roughly $3.5 million over 10 years
Summary
Piper Sandler representative Eric Herringer told the board the district can refinance roughly $47 million of 2016 bonds at an estimated all‑in true interest cost near 2.94%, producing about $3.5 million nominal savings over 10 years and more than $3 million in present‑value savings if closed before the March 15, 2026 call date.
Eric Herringer of Piper Sandler told the Bonneville Joint District board that market conditions make refinancing the district's 2016 A and B bond series a practical way to lower future debt service. Herringer, who said the two series total roughly $47 million and carry an average coupon of about 4.63%, told the board he is seeing an all‑in borrowing cost near 2.94% for a tax‑exempt refunding if the district closes in mid‑December.
"The call date is really the key thing," Herringer said, explaining the bonds are redeemable on March 15, 2026, and that tax‑exempt refinancings are most actionable in the 90 days before that date. He said replacing the older 20‑year terms with 10‑year market maturities and capturing current tax‑exempt pricing could produce roughly $3.5 million in nominal savings over the next 10 years and more than $3 million when discounted to present value. He also noted estimated issuance costs of about $300,000–$325,000 are already built into those projections.
Board members asked for clarification on net savings after fees; Herringer confirmed the fee estimate and described mechanics for a December closing that would place sale proceeds into an escrow account until the call date. He also outlined the schedule: marketing and disclosure work in October, an expected board authorization in November delegating final terms to the superintendent and finance director, a potential pricing in early December, and closing about Dec. 16 to meet the 90‑day timing.
District officials were told the refunding would not extend the final maturity beyond 2033, increase outstanding debt, or change repayment terms; the aim is to reduce the district's annual bond payments and therefore lower the property tax levy needed for debt service. The presentation also noted use of the state's school bond guarantee as a credit enhancement and the role of Moody's (rating) and bond counsel in the process.
The chair framed next steps as seeking board authorization, subject to a minimum savings target and delegated authority to finish pricing terms once market conditions are confirmed.
The board did not take a final vote on sale authorization at the meeting; Herringer recommended preparing the documents and returning to the board in November with updated numbers and a proposed delegation for final terms.
