The Socorro Independent School District Board of Trustees unanimously approved refinancing bonds from its 2004 bond election, series 2008, at the regular board meeting, held last month.
The district will capitalize on current lower interest rates to replace the higher interest rates of series 2008. The savings of the reduced interest costs are a little over $1.3 million, said SISD Chief Financial Officer Tony Reza.
“It is likely that rates will start to go up and we want to capture these lower rates and reduce future interest expenses for these bonds,” Reza said. “These savings will enable us to reduce cost and continue being good stewards for district property owners.”
The savings will impact the district’s bond debt fund by increasing the district’s debt capacity. It will allow the district to make improvements to its schools without raising taxes and without using money from its general fund which is used for instruction.
“Because we are a growing school district we have to take advantage of this opportunity,” Reza said.
The total callable principal amount for bond series 2008 is $8.9 million. In order for SISD to refinance the bonds at an opportune time, minimum sale parameters such as a maximum principal amount, a maximum interest rate, and a minimum savings threshold must be present. The district exceeded these parameters and in doing so, continues to be fiscally responsible with taxpayer funds.
Bond 2004, which was valued at $189 million, allowed the district to build six new schools, the District Service Center, and other campus additions and improvements.