Royal ISD recently leveraged a low interest rate environment to the tune of $2,651,131 in savings, which will allow the district to pay existing bonds back two years early. The district was able to secure an interest rate of 1.82% (down from 4% in the 2013-series bonds and 3.5-4% in the 2014-series bonds). School districts utilize refundings when bonds outstanding are eligible to be replaced with lower interest rate bonds, saving local taxpayers future interest on the bonds.
RISD Financial Advisor Lucas Janda said, “The Royal ISD Board of Trustees is committed to implementing strong financial practices. It is their diligence in careful financial planning that has allowed the district to take advantage of this opportunity to save taxpayer dollars. The recent refunding has resulted in a significant decrease in the future debt service amounts.”
In a fast-growth community like Royal ISD, the balance between retiring debt early and ensuring their capacity to fund student needs while staying mindful of the tax impact on taxpayers can be quite difficult when coupled with future unknowns such as property values and interest rates. However, conservative debt strategies over the years has well positioned RISD to embrace their vision of “investing in our tomorrow”.