The William S. Hart Union High School District’s recent action to refinance its 2003 general obligation bonds will save taxpayers nearly $10 million over the next 14 years, according to District officials.
According to officials, the District entered the bond market on Feb. 16, to refinance $54 million of its outstanding general obligation bonds from Series A of the Measure V authorization. The original bonds, which were sold in 2003 to fund modernization projects at four District high schools, were refinanced from a 4.34 percent interest rate to 2.69 percent.
“The District is committed to doing everything possible to meet the needs of our students and community, while also being a good steward of taxpayer dollars,” Superintendent, Rob Challinor, said. “This is part of a larger overall facilities funding program and an example of our proactive approach to leveraging opportunities that will benefit taxpayers.”
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District officials describe the process as being similar to refinancing a home mortgage. The prime benefit of bond refinancing is to save borrowing costs by taking advantage of current lower interest rates. The difference is the District is not permitted to extend the period of the borrowing.
The lower borrowing cost is attributed in part to the District’s high bond rating of Aa2 by Moody’s, which reflects the District’s sound financial management, including a healthy fiscal position and large property tax base.
While the refinancing did not generate new money for the Hart District, taxpayers will experience nearly $10 million in total savings over the next 13 years.