HOOVER – The Hoover Board of Education will save about $7.8 million over the coming years by refinancing existing debt.

The Board approved the measure as recommended by Superintendent Kathy Murphy and Chief Financial School Officer Tina Hancock at a special called meeting on Thursday, Feb. 14.

Discussions about the refinancing and a possible new loan component of the plan began at the regular scheduled Board meeting on Monday, Feb. 11, but officials wanted more time to consider.

The Board ultimately decided not to borrow an additional $12 million that could have been used for capital projects.

The school system’s financial advisor told the Board that 14 banks were contacted about the debt restructuring before a decision was made about which could best serve the system’s needs.

The bank initially offered an interest rate of 3.85 percent, and the two sides agreed on a rate of 3.8 percent—an additional $856,000 in savings.

Though school officials all seemed to agree in principle to the debt restructuring, some thought it would be a good opportunity to secure a new loan for planned initiatives.

Because of the debt restructuring, the school system could have saved $1.6 million over the life of the debt even with the new $12 million loan, officials said about the plan compared to existing debt servicing that includes annual payments of about $13.3 million.

But officials decided they would rather realize the extra savings that would come with the restructuring without a loan, and avoid extending the maturity date of the debt beyond 2040.

Murphy also updated the Board about the plan to add 18 classrooms at Berry Middle School. While the project will be funded in the Fiscal Year 2020 budget that begins in October, Murphy said the school system will proceed with engaging an architect for the project: Lathan Associates.