The San Ramon Valley Unified School District recently refinanced and restructured its Measure A general obligation bond, a move projected to save property owners more than $17 million in taxes.
Used to repair and upgrade aging facilities throughout the district, the $167.9 million bond series was passed in 2002; residents currently pay $44.80 per $100,000 assessed home value each year. The refinancing of the bonds was authorized by the Board of Education at its May 22 meeting.
"Ten years ago, the community generously voted to support its schools by passing Measure A," said Superintendent Steven Enoch. "Taking advantage of the low interest rates and the district's favorable bond rating allowed us to generate considerable savings for property owners."
The interest rates on the outstanding bonds from the 2002 authorization ranged from 3.55 percent to 4.77 percent. The interest rates for the new bonds, issued on June 19, range from 0.52 percent to 3.14 percent, a difference that will save property owners a collective $17,002,379, or approximately $350 over the next 19 years.
Newly refinanced and restructured bonds will provide for a more stable annual payment and prevent spikes in yearly tax bills, said Community Relations Coordinator Terry Koehne. Rates would have gone up 20 percent over five years, creating confusion on tax bills, noted Assistant Superintendent Gary Black.
Prior to the bond sale, SRVUSD's bonds were rated by Standard and Poor's and Moody's, which provide credit ratings and research covering debt instruments and securities worldwide. Moody's assigned the District the rating of "Aa1" with a "stable" outlook. The rating of "Aa1" is the highest rating ever assigned to a California school district.
Standard & Poor's assigned the rating of "AA" with a "stable" outlook, and referenced the "high desirability of the district's educational services, and good financial performance demonstrated by the district's strong reserve levels."
As a result, the district could see significantly less borrowing costs on future obligations. Although it has made no official statement, the Board of Education may advocate for a facilities bond on the November 2012 ballot.
"(Restructuring) could have significant cost savings in the future if and when there ever was another series of bonds," said Black. "All the financial pieces aligned with those historical low rates."