Special to the Journal
With the completion of a $130 million bond sale this week, Belton ISD reached an important milestone in its 2017 bond program. The district now has the funding to move forward with the construction of a new high school and elementary school as well as renovations of two existing facilities.
In May, voters approved issuing bonds to fund the projects. At the time, the district’s financial advisors anticipated issuing the bonds in two phases: a $100 million issue in 2017 followed by a $49.7 million issue in 2019.
With interest rates below their 10-year averages, last month, the school board authorized a larger initial bond issue. When they were priced, the true interest cost of the 30-year bonds was calculated at 3.65 percent.
“We work closely with our financial advisor to monitor the market,” superintendent Susan Kincannon said. “The larger initial bond issue gave us an opportunity to lock in a low interest rate now and to reduce the potential cost to taxpayers if interest rates rise in the next two years.”
It’s an approach that the district has used before. Belton ISD has refunded existing bonds seven times since 2010 to take advantage of low interest rates. According to district officials, that has saved taxpayers more than $8.7 million in interest payments.
Even with the larger initial bond issue, taxpayers will see a smaller than expected tax increase. During the bond election, voters were told that Belton ISD’s interest and sinking tax rate could increase 18.69 cents per $100 of assessed valuation. The actual increase will be 16.3 cents.
“Our board has been committed to addressing our growth needs in a fiscally responsible way,” board president Randy Pittenger said. “This step continues that commitment, and we are pleased that the work of our staff and advisors has resulted in such a favorable outcome for our taxpayers.”
The district’s bond issue received an ‘AA’ underlying rating from Fitch Ratings. Bonds are rated from ‘AAA’ to ‘D.’ An ‘AA’ rating is the second highest rating that the company assigns and, according to Fitch, reflects “the district’s strong economic underpinnings.”
That assessment was recently echoed by the Texas Education Agency, which produces an annual Financial Integrity Rating System of Texas (FIRST) report on each school district in the state. Preliminary reports for the 2016-2017 school year were released on Aug. 8.
Belton ISD received 100 out of 100 possible points for an “A” or “superior” rating. This is the sixth consecutive year that the district has received a perfect score on the FIRST report.
“When our community members pay their property taxes or vote to approve a bond issue, they’re trusting us to be good stewards of their tax dollars,” Kincannon said. “It’s a responsibility that we take seriously. We carefully review every section of the budget and ask whether or not each expenditure will support our mission to provide an education that challenges all of our students to excel.”
The board of trustees will adopt a budget and tax rate for the 2017-2018 school year at their meeting on Aug. 21.