Clear Creek ISD could save millions after the board of trustees voted unanimously Friday, Oct. 2, to begin preparing a bond-refunding transaction on $150 million in outstanding debt.

The vote does not lock the district into refinancing. It authorizes staff to prepare the paperwork so CCISD can move fast if market conditions improve.

Financial advisor Terrell Palmer told the board the district set a minimum savings threshold of 3%, or about $4.5 million. Palmer said his team hoped to hit closer to 5%, which would save roughly $7.5 million, Community Impact first reported.

That timing matters. A 2017 federal law, the Tax Cuts and Jobs Act, narrowed the window for tax-exempt bond refinancing to 90 days before a bond's call date. The bonds in question have a call date in February. Based on Palmer's explanation of that 90-day window, the district would need to act around November.

Interest rates have climbed more than 100 basis points since March, Palmer said. He attributed the increase in part to the war with Iran.

"We think once those events in the Middle East clear up, oil prices will go down, inflation fears will dissipate and interest rates will come back down," Palmer said at the meeting.

Palmer recommended the board approve the authorization early so the district could act quickly if rates fall. He noted pent-up demand across the bond market, with many issuers waiting on the sidelines for lower rates.

Trustee Arturo Sanchez, who represents District 3, called the preparation "an act of good faith" that gives CCISD flexibility to pick the best moment to refinance.

The potential savings come as the district navigates a tight budget year. CCISD approved a fiscal year 2026-27 budget in August that included a $22.8 million shortfall, driven by declining enrollment and reduced state and local funding. The board adopted a flat tax rate of $0.969 per $100 valuation at its Monday, Sept. 28 meeting.

Chief Financial Officer Alice Benzaia said at a Monday, Aug. 17 board meeting that the district's ability to pass bonds without raising the tax rate is likely ending. Debt service reserves are projected to fall from 34% to the board-mandated minimum of 10% by fiscal year 2029-30.

The board's next step is to monitor interest rates and decide whether to pull the trigger before the February call date.