Leander ISD leveraged a low interest rate environment to the tune of $336.6 million of interest savings.
The pricing comes on the heels of Standard and Poor’s, a national credit agency, upgrading LISD from a “AA-” bond rating with a stable outlook to “AA” with a stable outlook.
School districts utilize refundings when bonds outstanding are eligible to be replaced with lower interest rate bonds – saving their local taxpayers future interest on such bonds.
The LISD refunding marks the third time this has been done in the last 18 months, with a cumulative savings to taxpayers of $464 million.
LISD Chief Financial Officer Lucas Janda said, “The Board continues to maintain strong financial practices, and the most recent refunding has resulted in significantly lowering the maximum annual debt service amount and reshaping our debt profile.”
Janda explained that there is a balance to strike when considering how to structure voter-authorized debt. In a fast-growth local community like LISD, the balance between retiring debt early, ensuring capacity to fund student needs, and being cognizant of the tax impact on taxpayers can be quite difficult when coupled with future unknowns, such as property values.
The Board’s debt strategy is a blend of all aforementioned strategies, and LISD is well-positioned financially. LISD’s debt is 50-50 between current interest bonds (CIBs) and capital appreciation bonds (CABs), the tax rate has been managed to allow for the early retirement of debt, and a steady annual debt service amount (versus one that would lean upon continued property value growth) allows LISD to be well-positioned to handle future enrollment growth in an uncertain economy.
For more information, please visit LISD’s Financial Transparency page at www.leanderisd.org.