At a called meeting of the Troy City Board of Education Monday night, the board voted to refinance its $6.5 million debt service through a leasing agreement with the Educational Bonding Authority and add $15 million of bond financing that will go to capital improvements.

The board held a work session on Nov. 18 to discuss potential “worst-case scenario” budgets under various fund received from $4.5 million to $15 million.

Monday night, Superintendent Dr. Linda Felton-Smith recommended that the board approve adding $15 million to its debt service. The board unanimously approved Felton-Smith’s recommendation.

The total debt service will be $21.5 million and will be financed at 4.2 percent or below with financing spread out until Sept. 2041 with payments of $573,456 the first four years compared to the current payment of $713,000.

Felton-Smith said interest rates are the lowest in 40 years, so now is a good time to refinance the school system’s debt service.

Dr. Jason Edwards, board member, said that the timing was perfect.

“To [have waited] any longer for the funds would have risked losing an ideal market,” he said.

The system can now enter the bond market and the funds should be available in from 45 to 60 days – around the New Year.

Felton-Smith said the funds must be used for capital improvements. The high school is 50 years old, the middle school, 40 years and the elementary school, 20 years so renovations are needed and even new buildings are a possibility. Felton-Smith mentioned that a new middle school could be in the plans.

With the additional $15 million in funding from the bond refinancing, the Troy City School System has a fund reserve of five to seven years and, therefore, the refinancing should not put a financial burden on the system’s coffer.