Carroll ISD authorizes first issuance of bond funds

by PegNews wire

Carroll School Board members voted yesterday to authorize the first issuance of bond funds following May’s voter-approved, $138 million bond election. Trustees met to consider the sale during a special called meeting this afternoon at the CISD Administration Center. The $86 million sale included $65 million from the 2009 bond and $21 million in existing, prior bond funds. The action came at the recommendation of the district’s financial advisor, Lewis Wilks of Coastal Securities, and Bond Counsel, Mark Malveaux of McCall Parkhurst & Horton.

Wilks provided Trustees the details of the three-series bond issuance that included about $58 million of taxable Build America Bonds, $22 million of tax-exempt refunding bonds and $7 million of zero coupon refunding bonds.

“Carroll ISD is the first school district in the state of Texas to issue Build America Bonds,” said Wilks. “We had a very strong market yesterday when we priced the bonds, and because of that, CISD and its taxpayers will see long-term benefits.”

Different from traditional tax-exempt bonds, Build America Bonds (BABs) are a new financing tool that came out of the American Recovery and Reinvestment Act of 2009. BABs provide state and local government entities with funding at much lower borrowing costs, and the issuer receives a 35% rebate on each interest payment made. Interest on the bonds will accrue from their date of delivery and will be payable beginning February 15, 2010.

The district stands to save over $6.5 million with BABs versus traditional tax-exempt bonds and just over $3 million in the refinancing of prior bond funds, which was part of the series approved by Trustees today.

“The Board’s ever-present commitment to sound fiscal management is reflected once again by strong financial ratings which were affirmed by Standard & Poor’s AA rating and Moody’s Investors Service Aa3,” said Superintendent David J. Faltys. “These top financial ratings are setting our school district up for sustainability, and, ultimately, resulting in a cost-savings for our taxpayers.”

The next regular meeting of the Board of Trustees is scheduled for Monday, July 27. The public portion of the meeting will begin at 6:30 p.m. in the auditorium of Johnson Elementary School, 1301 N. Carroll Avenue in Southlake.

Source: Carroll ISD