The Ouachita Parish School Board is expected to realize some $722,000 in interest savings on payment of a 2011 series of bonded indebtedness to pay for school projects in eastern Ouachita Parish.
The School Board received the good news during its regular meeting on Nov. 10.
In September, the School Board began the process of issuing up to $6.25 million in refunded bonds to realize the interest savings. Refunded bonds refer to the process of refinancing old bonded indebtedness by issuing new bonded indebtedness, hopefully at a lower interest rate to generate savings.
Grant Schlueter, the School Board’s bond attorney, noted the refinancing of the school system’s bonded indebtedness benefited taxpayers.
“All the savings are to the benefit of the taxpayers of the east district,” said Schlueter, with the New Orleans law firm Foley & Judell. “Very healthy refinancing with significant savings.”
Refunded bonds do not produce any additional revenues for the School Board but reduce the burden on taxpayers.
Nnamdi Thompson, the School Board’s municipal advisor, noted the debt would not be extended.
“We do not extend the debt,” said Thompson, with Government Consultants. “The previous bonds would be paid off in 2031, and these bonds will be paid off on the same date, just at a lower interest rate.”
Ouachita Parish Schools Superintendent Don Coker
“This looks really easy, and it looks really simple, but the hours that go in to making these things happen is a lot,” said Coker, recognizing school system business director Regina Mekus and other School Board staff. “Thank you.”
According to Coker, taxpayers could expect the School Board to refinance more debt in the future if interest rates remained low.
According to Schlueter, the School Board’s success in refinancing the 2011 bond series exceeded the standards established by the state Bond Commission.
“Your percentage savings were nearly 12 percent,” Schlueter said. “The highest on the Bond Commission’s scale is 5 percent. This is many, many times bigger than that.”