College of the Canyons officials announced Tuesday they plan to refund $31 million of a recent outstanding general obligation bond, saving taxpayers $8.3 million over the next two decades, according to COC.
A bond measure, in this case, Measure M, passed by voters in 2006 for $160 million, is paid out through the Santa Clarita Community College District issuing bonds that can be bought by investors. That money is then turned around and used for campus facilities improvements.
In order to pay back Measure M, taxpayers approved, on average, each property owner in the college’s service area would pay an additional $30 per year in property taxes.
What this move by COC does, in essence, is refunding at a lower interest rate, which means the taxpayer pays less money.
“It’s like refinancing your mortgage … when interest rates go down, homeowners refinance their mortgage to take advantage of the lower interest rates, and therefore, lower their payments,” said Eric Harnish, COC’s vice president of public information.
Harnish said the difference, however, between this and refinancing your home, is that the refinancing of a home extends the mortgage, but that is not the case with school district general obligation bonds. The district’s taxpayers will have cash flow savings of $8.3 million over the next 23 years, which represents an overall savings of 12.96% of the bonds that were refunded.
“The Santa Clarita Community College District worked quickly to take advantage of the current low interest rates to refund the bonds and save local property owners money in the process,” said COC Chancellor Dianne G. Van Hook in a statement issued Tuesday. “Due to the college’s solid credit ratings, our bonds always attract interest from strong and stable investors.”
The Santa Clarita Community College District board of trustees, which oversees the college, voted on Wednesday, Nov. 6, to refund these particular general obligation bonds from Measure M. The sale was completed on Nov. 14.
Funding from other bonds has gone on to purchase and/or build other school facilities such as the land the Canyon Country campus sits on, the various new classroom and lecture hall buildings erected since 2001 and the Valencia campus’ University Center.