HPISD saves $7.2 million by refinancing 2008 bonds

Aaa rating, refinancing at 'optimal time' nets savings

After considerable input from the district's Finance Committee and closely monitoring the bond market for more than a year, the Highland Park Independent School District selected Tuesday, Dec. 1 to refinance $53 million of its remaining bonds from the 2008 bond election.

The net savings to taxpayers over the life of the bonds will be more than $7.2 million, more than what was initially projected.

"This is outstanding news for HPISD taxpayers," said HPISD Superintendent Dr. Tom Trigg. "There are a lot of very bright people who guided us in selecting the optimal time to refinance the 2008 bonds. That counsel was vital to our success."

The district's Finance Committee is comprised of the elected Board of Trustees, as well as several community members and parents with significant experience and expertise in finance. There has been significant discussion among committee members during the last several months about the best time to move forward with the sale.

Two days following the district's bond refinancing, December 3, the bond market dropped significantly and interest rates increased. Had the district waited until then, the savings to taxpayers would have been significantly less.

As it stands, the $7.2 million in interest savings will take place during the next 13 years with annual savings in excess of $600,000 each year from 2019 through 2028. That equates to about half a cent on HPISD's tax rate. 2008 bondholders will be paid through 2018 when the bonds will be redeemed from an escrow account established for their payment. The new 2015 issue with lower payments will now be the responsibility of HPISD.

Assisting in the sale is the fact that the district's financial position remains very strong. Even with the knowledge of HPISD's upcoming $361.4 million bond issue, Moody's Investor Service agency continues to rate the district with Aaa, the highest rating possible.