Professional Meeting Microphone,Meeting room Concept.


The City Schools of Decatur Board of Education approved a resolution to refund the 2014 certificate of participation during their regular meeting on June 13, 2023.

DECATUR, Ga. – The City Schools of Decatur Board of Education approved a resolution to refund the 2014 certificate of participation during their regular meeting on June 13, 2023. The resolution authorizes the superintendent to engage financial professionals to prepare for the potential refinancing of outstanding debt, which could save the district approximately $600,000 to $850,000.

In 2014, the School District issued approximately $18.1 million of debt for various school projects. When originally issued, it established a call (redemption) date of May 1, 2024 which means that it could not be paid off prior to that date. The Decatur School District is proposing to refinance $14.6 million in outstanding debt from a 2014 issuance for various school projects, with the  aims to achieve net budgetary savings in the current market environment.

Doug Gephard, first vice president of Davenport and Company, the school district’s financial advisor, presented the opportunity to the board. Gephard explained that the current interest rate environment and the size of the transaction make it an ideal time to refinance the bonds through a competitive public market sale.

“Right now, the savings are in the $750 to $850,000 range,” Gephard said. “We’re subject to market fluctuations on that.”

The refinancing plan involves using the Decatur Public Facilities Authority as the conduit issuer, which would eliminate the collateral currently being used and potentially result in a higher credit rating for the bonds. The school district would pledge its full payment credit up to the millage rate cap to make the payments through an intergovernmental contract.

Gephard emphasized that the district would not be locked into the rates until the actual day of the sale, which is projected to occur in early August. The board would then have to approve the final terms and conditions of the debt issuance at their August meeting.

“Ultimately, we want the yield, the new yields on the bond to be lower than the existing yields,” Gephard explained.

Board members asked questions about the potential savings, the impact of partially refinancing the bonds, and the fees associated with the transaction. Gephard clarified that his company’s fees are at risk pending the completion of the transaction.

The resolution passed unanimously, allowing the superintendent to begin the process of preparing for the potential refinancing. If market conditions remain favorable, the district could see significant savings on their outstanding debt.

“I’d like to request that Doctor Broome provide us a detailed forecast of what interest rates are going to do over the next six to twelve months,” board member James Herndon joked, eliciting laughter from the room.

The refinancing opportunity comes after the district successfully refinanced their 2010 bonds in 2020, saving approximately $1.6 million. Gephard’s company also assisted the City of Decatur in refinancing a series of bonds issued on the school district’s behalf, resulting in an additional $500,000 in savings.

The board’s decision to explore the refinancing option demonstrates their commitment to finding ways to save money and allocate funds towards the students of Decatur. If the transaction moves forward, the district could see a significant reduction in their debt service payments over the next 20 years.

The actual terms and conditions will be presented for final approval at the August board meeting.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.