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Home News-Telegram News SSISD saves $2.5M by refinancing bonds

SSISD saves $2.5M by refinancing bonds

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Officials for Sulphur Springs Independent School District approved a few financial matters during their Monday night meeting, including budget amendments, a depository bank bid and a contract with Region VIII Education Service Center. They also discussed the refunding of bond notes, which administrators approved last week.

 

SSISD earlier this month gave the nod to Southwest Securities to refund bond notes. The school board, following a presentation in May from the securities company, gave administrators authority to act should market conditions become favorable for refinancing of school bonds at lower rates, with the end goal of either reducing regular payments or longterm savings.

The cut-off deadline for this cycle was June 5. The district received nine bid submissions. Officials were hoping by reissuing the bonds, the district would save about $2.4 million in payments. The bid accepted came out even better, with the district saving $2.5 million, SSISD Business Manager Sherry McGraw reported.

The district opted to keep payments at the same rate instead of reducing them, for an overall long term saving. By keeping the rate the same, the district will be able to pay the full debt off seven years earlier.

The bid and re-issuance process will be finalized July 9.

SSISD was also required by Texas Education Agency to complete a depository contract by June 15. McGraw noted the district sent out depository bank bid packets to six local banks. Schools have the option of extending depository contracts in two-year increments, up to a maximum of six years before they are required to go through the bid process again. 

At the June 4 deadline, only two bids were returned, one from SSISD’s current bank depository, City National Bank, and one from Guaranty Bond Bank. McGraw said she was confident both banks could handle the district’s business equally well as they both submitted comparable bids. However, McGraw recommend the board stay with CNB.

"The district is content with CNB. I think Guaranty Bond would handle our business equally as well. We are established at CNB. I don’t see a reason not to consider staying with them. It’s a lot of work to switch,” said McGraw, noting that of the three types of accounts, the district uses the local depository’s interest bearing account.

On a motion by trustee Jacquelyn Brice and seconded by trustee Tammy Cooper, the school board approved CNB as the district depository on a 5-0 vote; trustees John Prickette and Don Sapaugh were unable to attend Monday’s meeting.

Trustees also unanimously approved, on a motion by trustee Jason Dietz and seconded by Cooper, budget amendments for March through May.

McGraw noted that the amendments were primarily for the moving of funds from one designated function to the other, or re-categorizing of funding. Sometimes, changes are made based on the way the state classifies certain finances from year to year. One example was funds used for student transportation to UIL events through the state level of competition. She also noted the biggest amount, $152,000, appeared to be added to the budget. However, it’s an amount trustees approved in the fall for one-time stipends for employees, provided funding allowed.

Also approved was a contract with Region VIII Education Service Center. Superintendent Michael Lamb noted that the contract was a bit different from last year, only $89,250 compared to the $106,072.14 contract of the 2012-2013 school year. Many are co-oped services. Some the items the district checked in the ESC contract benefit students, staff and special populations, some funnel state and federal funds, including continuous improvement planning for leadership support, library instruction technology education cooperative, Elementary and Secondary Education Act (formerly No Child Left Behind), bilingual and English as a second language, Safe and Supported Schools Initiative, and CSCOPE core curriculum package for kindergarten through 12th grade and CSCOPE online management system. 

Lamb noted that CSCOPE is a little higher this year ($26,000 compared to 25,778.04 for core curriculum). However, since CSCOPE “is dying” due to recent state efforts, the cost of the program by the second semester should go down as parts of it are taken away. That should reduce the second semiannual payment (due in February). The district is also reducing TxEIS services this year, with Skyward being utilized for those student services instead.

 

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