Bond refinance could save millions

RISD works on plan to restore ratings for accountability
Reporter Editor

Appreciated! Library Aide Sarah Cleveland gets, and gives, a hug with trustee Kent Bowermon as member Mike Pruett looks on. 
Reporter/Mike Brown Appreciated! Library Aide Sarah Cleveland gets, and gives, a hug with trustee Kent Bowermon as member Mike Pruett looks on. Reporter/Mike Brown Talk about starting the year with good news.

Rockdale ISD trustees took the first step Monday toward refinancing the bonds used to construct the new high school and intermediate school, a move financial advisors say will save the district millions of dollars.

Initial savings figure given by chief financial officer Marla Wallace was $1.5 million to $2 million. Advisor Lewis Wilks of Houston later told board members the savings could be considerably higher, depending on the timing of their move and the future of interest rates.

Meeting in regular session in the Central Administration Building, board members also discussed the RISD’s game plan to improve accountability test scores—after being stuck in a rating “no man’s land” for two years—and received numerous gifts and accolades as part of the annual School Board Recognition Month.

SAVINGS—Wilks, representing Coastal Securities, had both simple and complex explanations of the refinance situation for board members.

Simple—There’s a great opportunity to save by refinancing because the bonds are being paid back at 5.10 percent and rates have slipped all the way to a current 2.63 percent.

Complex—Everything depends on the method of refinancing, both in the amounts—incremental vs. the entire $25 million still due— and the timing.

And that part will take some fine tuning and a great deal of financial skill.

The key will be to maximize the district’s savings by balancing the “penalties” incurred in the refinancing process with the gains reaped by obtaining a much lower interest rate.

The first step will be deciding whether trustees want to refinance the entire $25 million, due in 2017, or do it in increments, which have the potential to bring even higher overall returns, if the timing is right.

Wilks suggested an initial increment of $8.5 million, if that’s the route trustees want to pursue.

Advisors noted a certain amount of market forecasting will be an integral part of the process, either way.

“It’s like buying a computer,” You don’t want to go check the prices the next day because they will have changed,” attorney Tom Sage of Andrews-Kurth, representing the district, said.

“What we’re asking you tonight, is a bird in the hand worth two in the bush, and how many birds do you want?” Sage said.

After a lengthy discussion the board agreed to empower CFO Wallace, Supt. Dr. Howell Wright Jr. and board president Lee Jenkins with the authority to approve a refinancing plan prepared by advisors.

The motion includes a stipulation that savings be no less than 12 percent on the incremental option, no less than 10 percent on the all-at-once option.

DATA TRAP—During the annual AEIS hearing which preceded Monday’s session, trustees voiced some frustration with an accountability situation which keeps getting RISD listed as a low-performing school based on data that’s now two school terms old.

Two weeks ago, 2011 TAKS score data landed Rockdale High School and Rockdale Junior-High School on the Public Education Grant (PEG) list.

Pam K aufmann, assistant superintendent for instruction and administration, said TAKS scores since 2011 show some improvement.

And the district has made strides to address issues raised two years ago. “We’ve been doing site visits, going to meetings, trainings, to see some of the things other districts are doing that maybe we’re not doing,” she said.

She said Rockdale ISD has implemented programs since 2011 including student interventions.

“I know we’re doing the things that the strongest districts are doing,” Kaufmann said.

But she pointed out the district won’t have an opportunity to get out of the “data trap” until there’s another accountability testing, something that’s dependent on the state. See editorial, page 4A.

RECOGNITION—January is School Board Recognition Month and groups from all three campuses made presentations to school trustees ranging from “gold medals” to step-ladders to clothing and food items.

School trustees are Troy Zinn, Lin Perry, Michelle Lehmkuhl, Lee Jenkins, Mike Pruett, Kent Bowermon and Wenda Dyer.

In other business, trustees:

• Hired Kelly Windham, current intermediate school teacher, as the new high school counselor.

• Called the 2011 school board election for May 11. Terms expiring are Place 3 (Lehmkuhl), 4 (Jenkins) and 5 (Dyer).

• Heard counselor Lynette Guerra report eight students still need to master exit-level TAKS tests.

• Okayed application of a low-attendance day waiver for Dec. 20 at the junior-high and elementary campuses. If granted, low attendance on that day will not count against the district in the state funding formula.

• Honored the following in the monthly Pause for Praise program:

Elementar y—Audrey Pelzel, reading specialist; Charlotte Roepke, PE aide.

Intermediate—Kelly Windham, fourth-grade teacher; Kristi Moreland, receptionist/secretary.

Junior-high—Tanya Mynar, eighth-grade science teacher; Pat Jerman, special education aide.

High school—Carla Johnson, algebra I teacher; Sarah Cleveland, library aide.

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