Bond refinance for Roaring Fork Schools would save taxpayers about $1.6 million
Roaring Fork School District taxpayers could see an annual savings of $260,000 over the next six years with the district’s latest plan to refinance debt from previous facility bond issues.
The Roaring Fork school board last week unanimously agreed to authorize district finance officials to pursue a refinancing deal for about $27.7 million in bonds.
Those bonds were reissued in 2011 and 2012 as part of a refinancing package relating back to an $86 million bond issue approved by district voters in 2004. The bonds went to pay for the new addition and renovations at Glenwood Springs High School, the new Roaring Fork High School in Carbondale and buildout of Carbondale’s Crystal River Elementary School, among other projects.
“Periodically, market conditions allow us to refund (refinance) a portion of our general obligation bonds due to lower interest rates, resulting in savings to our taxpayers,” Shannon Pelland, chief financial officer for the district, and Finance Director Nathan Markham explained in a memo to the board.
Taking advantage of that opportunity now is projected to save about $1.6 million in bond payments over the next six years, they said.
Public entities can only refinance their bonded debt a certain number of times from the original bond issue for tax reasons, Pelland explained in a follow-up interview.
“As soon as bonds are eligible to be refinanced, we have our bond underwriters take a look to see if it makes sense,” she said. “If interest rates are dropping and it gets to be about 3% or more in savings, it’s worth doing.”
Bond consultants from the firm Piper/Sandler conducted an evaluation and came up with the estimated savings if the district were to refinance at this time.
Added Markham, “it’s all based on estimates, so we will continue to monitor until the date of execution, and then seek final authorization from the board to proceed.”
That decision is likely to come by early April, he said.
Even then, the district retains the right to back out of the transaction up until closing, “in the unlikely event that the refunding no longer makes sense as a result of market conditions,” according to the board memo.
The most recent Roaring Fork Schools bond issue involved $122 million in bonded debt approved by voters in 2015. That package included the new K-8 Riverview School outside Glenwood Springs, the new addition and renovations at Glenwood Springs Elementary School, a new mid-valley student transportation facility, and $25 million in funding for the district employee housing program.
Pelland said those bonds are not likely to be considered for refinancing until the call date in 2025.
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