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La Vernia ISD OKs bond refinancing

La Vernia ISD OKs bond refinancing
Superintendent Tom Harvey of the La Vernia Independent School District (left) listens as school board President Michael Jendrusch reads a statement of the board’s support for Harvey at the beginning of the board’s May 21 meeting.

District could

save $668K

LA VERNIA The La Vernia Independent School District (ISD) could realize a gross, present-value savings of $668,000 by refinancing its series 2004 bonds, in a deal the board of trustees unanimously approved during its May 21 meeting.

The district’s bond counsel, Thomas Sage of Houston-based Andrews Kurth, said the district is currently paying an average coupon rate of 4.77 percent as it repays $6,425,000 in bonds. He estimates the district could refinance the debt at 2.93 percent, which would produce an annual savings of $37,000 to $40,000 until the bonds mature in 2034.

La Vernia ISD Superintendent Tom Harvey urged the board to refinance. He said the deal could reduce the interest and sinking portion of the district’s property tax rate. But Harvey cautioned that the district would not see all of the savings, because it receives state assistance in repaying the debt.

The district’s financial advisor, Lewis Wilks of Houston-based Coastal Securities Inc., said the bonds are callable in 2014. By refinancing them now at the lower rate, the district will experience $283,000 in negative arbitrage, which also reduces La Vernia ISD’s savings.

This is why the board’s action authorizes Wilks and Sage to complete the refinance transaction within the next 180 days. The bonds would be sold at the most advantageous time when interest rates are lowest and the proceeds would be used to repay the original investors. This process could begin as early as July 18, Wilks said.

Also during the meeting, parent Garrett Comeaux addressed the board about perceived technology deficiencies within the district. He said a recent inventory of computers in La Vernia High School revealed that 132 of 366 units slightly more than 36 percent used by students are more than six years old.

Several of these units utilize Windows 2000 and XP operating systems, which will prevent them from being switched over to Windows 7 during a technology update planned for later this year, Comeaux said.

In other business, the board:

¢Accepted a $20,000 donation for the La Vernia Intermediate School from that school’s parent-teacher organization.

¢Heard a presentation about continued district-wide technology improvements from Cheryl Young, librarian at the junior high and high school campuses, and Technology Director Allen Bordelon. The district continues to work toward round-the-clock access for students and teachers to its virtual desktop cloud system and toward the integration of thin clients.

Prior to any business being discussed, board president Michael Jendrusch read a three-page, typed statement supporting Harvey. For more on this, see article page 2.

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