TEMPLE, Texas – The Temple Independent School District will save more than $400,000 over the next five years after the district was able to refund bonds from 2012 this week.
The Temple ISD Board of Trustees will receive an update on the refunding during this Monday night’s meeting.
The district was able to refund $7,605,000 of the remaining principal at an interest rate of 0.713 percent. This will result in an estimated savings of $416,199 over the five years remaining before the bonds retire in 2027. This means the district will save an average of $82,710 per year in annual debt service payments beginning in fiscal year 2023.
The bonds refunded were originally sold in 2012, and become callable on February 1, 2022. During the board’s July meeting, trustees authorized district administrators to refund the bonds subject to a savings of at least three percent. The bonds were originally sold to fund capital projects within the district and interest rates ranged from two to three percent at the time of the sale. Dropping the rate to 0.713 percent means the district will save taxpayers approximately .2 cents annually on the I & S tax rate, effective with the 2022 tax rate adoption. Like refinancing a mortgage, the refunding did not decrease the principal of the bonds or change the term length. The savings will come from lower interest payments over the remaining life of the bonds.
The actual savings should amount to 5.279 percent, well above the three percent threshold set by the Board, and the total savings are nearly $11,000 higher than originally estimated when the refunding was first approved in July.
Source: Temple Independent School District