$1 million or bust that's the goal the Davis Board of Education has set before it will consider refinancing some $34 million in school building bonds.

Superintendent Richard Kendell told the board that a scheduled April 19 bond refinancing sale has been canceled because rates are too high at this time to generate the kind of savings that officials feel would make the transaction worthwhile. Bond interest rates are hovering around the 8 percent level, and officials think a maximum rate of 7.5 percent is needed to reap the kind of benefit desired.Kendell said if the bonds were sold at the present level, the up front savings to the district would likely be less than $600,000. He said administrators do not believe this would provide the kind of benefit the district is looking for, and recommended that he be authorized to continue monitoring interest rates should the trend reverse itself.

"At this point we're not convinced we can get the kind of return we want," Kendell said. "I think we should set a target of $1 million (in savings) and be prepared to act should that become a possibility."

Kendell said most of the preparation necessary for the sale, either a competitive bidding effort or a negotiated sale, has been completed and the final package could be ready for action within two to three weeks. At this point, indicators do not project a quick change in the market, and it will likely be a few months before interest rates move in the right direction.

The cancellation does affect the proposed sale of $1.73 million in new building bonds. The district had hoped to make a package deal out of the refinancing and sale of new bonds.

Business manager Roger Glines said that is still a possibility, although the new bonds will have to be sold within the next four to five months. That money is earmarked for construction of an addition to Central Davis Junior High in Layton.

If the market rates do not move in the right direction soon, the new bonds will be broken out and sold separately, Glines said.

Kendell said he has asked the district's financial advisers to develop proposals for a negotiated sale of the bonds to be ready to move should that seem the best option when rates move lower. He said the primary goal at this point is still for a competitive bidding of the refinancing package.

The district has until June 1992 to refinance the bonds and realize a windfall savings in interest payments. The refinancing is a one-time option, however, and officials want to realize the greatest savings possible from the move. The savings will result in a windfall that officials hope use in restoring the district's reserve fund and filling gaps in budget shortfalls generated by reduced state education funding.