Q The Bond Refinancing Act (Section 31-27-1 et seq) requires refunding bonds to result in a net present value savings of at least 2% and the State Bond Commission has adopted a savings requirement of 3%. Must refunding bonds issued under the General Refunding Law of 1934 (Section 31-15-1 et seq) result in a “similar, substantial” savings to the District in refinancing sixteenth section loans?

A The District may issue general obligation refunding bonds pursuant to Section 31-15-1 et seq to refinance the District’s sixteenth section loans. While there is no express savings threshold under the General Refunding Law of 1934, refunding of bonds should result in substantial savings to the District. While certain circumstances may arise that necessitate refunding of bonds which may not result in savings (e.g. to avoid a default), the result should be some other benefit to the District. The board should demonstrate and record on its minutes the benefits which will result from the refunding. (Attorney General’s Opinion to Caves, May 9, 2014)