Today’s topic is financial stewardship. RISD completed four major transactions during the past few months resulting in either substantial savings or increased revenue.

1989 Bond Refinancing

Sign up for our newsletter!

* indicates required

In February, we retired $63.4 million in 1989 bonds issued at an average rate of 7.4 percent and reissued them at an average yield of 4.47 percent, resulting in a 10-year debt service savings of $9.1 million.

RISD is the first district in Texas to capitalize on today’s low interest rates because way back in 1989, we included an early call feature on our bonds. It was a revolutionary concept in school finance circles back then, and we are reaping the rewards now.

The $9.1 million principal and interest savings can be repurposed into $6.2 million in equipment notes for such things as technology, library books, band instruments and the like. We don’t have specific plans yet, but rest assured we will seek community input.

Soft Drink Exclusivity Contract

In December 1997, we approved a contract for the exclusive sale of Coca-Cola beverage products on all of our campuses. Based upon current consumption levels, we will earn $9 million in commissions during the next 10 years, with $2.5 million received immediately.

Part of the $2.5 million is funding our exciting new summer school program for students in danger of failing TAAS. More is being spent on library books.

And we’re banking over $1 million to continue summer school funding for the next 3-5 years.

The remaining $6.5 million includes annual contributions totaling $250,000 for PTA scholarships, $100,000 for teacher awards, and $4 million in commissions to schools. The last $2 million will fund special programs.

Teacher Early Exit Program

This spring, RISD is offering an early exit incentive of one year’s salary up to $60,000 to teachers 55 and older, with 25 years teaching experience, to be paid out over four years.

If 60 percent of qualifying teachers accept this offer, the district will save $7.2 million, which can then be plowed back into teacher compensation.

1998 Bond Issue

In mid-April, we will sell another $45 million in bonds. Before then, we’re going to New York to convince Standard & Poor to raise our bond rating from Aa to Aa1. Our Moody’s rating is already AA+.

The higher rating could result in a $500,000 interest expense savings on our remaining $130 million bonds. We would also join the elite ranks of Texas’ highest rated districts.