Taking advantage of low interest rates and a strong credit rating, the Central school system recently refinanced millions of dollars in debt backed by sales taxes and will reap $330,000 a year in savings over the next decade, more than double initial saving estimates.

“It’s going to free up a considerable amount of money over the next 10 years,” said Grant Schlueter, a New Orleans-based bonding attorney with Foley & Judell.

On Monday, the Central School Board agreed to move forward with a second refinancing, this time to $7 million in property tax bonds, likely saving tens of thousands more a year.

The overall savings on the newly sold sales tax bonds comes to $3.3 million. That’s $2 million more than estimated two months ago. And the new interest rate on those newly sold bonds is a low 2.19 percent.

In addition, Central’s sound finances allowed the school district to sell fewer bonds than it had anticipated — almost $9 million rather than $11 million. Instead of selling $2 million more in bonds, Central qualified to purchase a special insurance policy. That insurance allowed the school district draw money from a required reserve fund to pay off the principal on its debt, Schlueter said.

“It’s a very healthy refunding,” said Schlueter. “One of the best in the state.”

The suburban Baton Rouge public school district, which has a history of saving money for its reserves, last refinanced some of its debt in summer 2017, saving about $527,000 overall. The savings then were accentuated because the credit rating agency Standard & Poor’s had the year before upgraded Central’s rating from A+ to AA-.

Superintendent Jason Fountain said there’s a chance Central’s credit rating could be upgraded again in the near future.

The newly refinanced sales tax bonds will allow Central schools to keep more of the money generated by 2½ cents worth of sales taxes and apply that additional revenue for the uses the voters have specified, including employee salaries and school operations and construction.

The savings from the new property tax bonds, if large enough, could be used to slightly lower the millage rate that property owners pay now in Central. The school district has reduced millages before.

On Monday, the board also revealed its first evaluation of Superintendent Fountain since he took over the job in January 2019.

Fountain earned a final composite score 2.84 on a 3-point scale. That’s actually one hundredth of a point higher than the final evaluation of his predecessor, Michael Faulk, Central’s first superintendent.

On Sept. 9, the board met behind closed doors to discuss Fountain's evaluation.

Board member Rhonda Browning said the board is extremely pleased with Fountain’s performance and that he met or exceeded expectations in every area rated.

“A school system, a company, a business is only as good as it leader,” Browning said. “This board feels as if it has chosen a winner.”

Email Charles Lussier at clussier@theadvocate.com and follow him on Twitter, @Charles_Lussier.