The William S. Hart Union High School District recently took action to refinance three separate series of general obligation bonds that will save taxpayers over $15 million over the next 18 years.
Similar to refinancing a home mortgage, the District locked in lower interest rates in order to lower its existing borrowing costs. The bond refinancing did not extend the repayment period of the debt and all savings from the refinancing will be provided directly to the community in the form of reduced property tax bills from 2021 through 2038.
The District entered the bond market on Dec. 9, to refinance $122.6 million of its outstanding general obligation bonds from the Measure SA and Measure V authorizations. Through the refinancing, the interest rates on the prior bonds issued in 2011, 2012 and 2013 were lowered from an average of 4.14 percent to 1.95 percent.
“The District appreciates the support of the community and is very pleased to be able to deliver significant savings to taxpayers,” said Ralph Peschek, Chief Business Officer of the Hart District. “Taking advantage of opportunities to reduce taxes for our community, while striving to provide the best education and school facilities possible for our students, is a priority for the Governing Board and administration of the District.”
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. The District was also able to increase the refinancing savings by combining the prior bonds into a single refinancing transaction and strategically determining the timing for the refinancing issuance.