Keller ISD board members voted unanimously to authorize defeasance, or paying down the principal, of debt at their Sept. 26 meeting. The move should save the district an estimated $3.4 million.

The details

During his presentation to the board, Chief Operations Officer John Allison said the district worked with its financial advisor, Hilltop Securities, to identify opportunities for savings on interest and sinking debt based on current market conditions.

According to the Texas Education Agency, public school taxes involve two figures, which divide school district budgets into two buckets. The first bucket is the maintenance and operations budget, which funds daily costs and recurring or consumable expenditures, such as:

• Teacher and staff salaries
• Supplies
• Gas and utilities

The second bucket is the interest and sinking budget, also known as debt service, which is used to repay debt for longer-term capital improvements. This can include building new schools, which is approved by voters through bond elections.

Defeasance is early retirement of debt, or in this case, the refunding of the Series 2020A bonds that could result in potential debt services savings of $3.4 million from the redemption of those bonds, according to Allison.


“The district has saved more than $35 million through debt refunding over the last six years,” Allison said.

What they’re saying

Place 4 Trustee John Birt asked Allison when the district could expect the defeased funds. Allison said the funds would come in over the next five years. He added that since they are I&S funds, they would stay in the district funding bucket.

“I’m excited that we have the ability to recoup some funding on the I&S side,” Board President Charles Randklev said. “It fits with the broader initiative of this board that we’re being good fiscal stewards and looking for cost savings.”