PGISD board looks to save big with bond refunds

TEXARKANA, Texas — Pleasant Grove Independent School District will hold a regular meeting of the Board of Trustees on Thursday, where they will consider the approval of an order to refund multiple bond series at lower interest ratesand hire a bond counsel for legal services.

The PGISD board will look to authorize the issuance of its unlimited tax refunding bonds, taxable series 2020B, and levy a continuing direct annual ad valorem tax for the payment of the bonds.

The district’s unlimited tax refunding bonds — Series 2013, Series 2014 and Series 2015 — are nearing their callable date, meaning the district is able to refund them at a lower interest rate, resulting in a significant annual savings.

The discussion section for this action in the Board Book states:

“Since we are refunding these series in advance of their call date, this particular 2020B series is taxable (not tax exempt). As you know, schools are exempt from taxes so this has no bearing on us and we still get PSF (Permanent School Fund) approval from the State (and their AAA rating). Due to COVID, tax exempt and taxable interest rates are nearly identical and this is why PGISD can once again explore an advance refunding like we did in 2015.”

The current stated interest rate for the three aforementioned bond series is 3.5% to 5.0%, but this will present the district with the opportunity to refund those bonds at a lower interest rate.

Potential savings over the life of the bonds may exceed $1,500,000.

The board will also look to do the same with unlimited tax refunding bonds, series 2020A.

The district’s current Unlimited Tax Refunding Bonds, Series 2010, have reached their callable date. This will allow the district to refund these bonds at a lower interest rate than the current 2.0% to 4.0%.

This will result in a potential average annual savings of approximately $91,000 per year.

The next item of the agenda will be to hire a bond counsel in order to help with the processing of the Unlimited Tax Refunding Bonds, Series 2020A and 2020B.

Also of note from the agenda is the board’s consideration of approval for a $500 donation from Randy and Becky Johnson to the Intermediate School to purchase new books for the book vending machine.