Conversion of Variable Rate Bonds Saves District Money

Trustees on Monday, April 13, approved the conversion of nearly $61 million in variable rate bonds to a term rate.  The conversion allows the district to pay down some $8 million of bonded debt while securing a lower interest rate on the remaining $53 million. The bonds were sold as part of the distict’s $597.1 million bond program, approved by voters in 2007. The district is well positioned with current interest rates and property values to continue to utilize variable rate bonds as part of the bond portfolio.

Superintendent Duncan Klussmann told trustees that the Texas Legislature is entering a “very busy time” with bills being heard in committee in both chambers. House and Senate versions of many bills are quite different, he said, and he anticipates a lot of “horse trading” near the end of the session as legislation gets passed and sent to the governor for signature.

Klussmann also presented five separate budget scenarios for 2016, each based on different Legislative spending bills and the interpretation of those bills. The House and the Senate have both added money to public education, but those amounts are quite different. Some in the Texas House – including House Education Committee Chairman Jimmie Don Aycock (R-Killeen) – want to tackle school finance reform before the Texas Supreme Court rules on the appeal of a lawsuit that found the finance system unconstitutional. And both chambers are committed to some sort of tax relief, although the versions are very different. Klussmann said that the district has the expenditure side of the 2016 budget nearly done, but the revenue side depends on what the Legislature does. He said the district wouldn’t adopt its budget until the June meeting. The district’s fiscal year ends June 30.