Santa Monica-Malibu USD Saves $2.8 Million Through Refunding Of 2006 Bonds
Posted Jan. 15, 2013, 9:05 am
Mitch James / Mirror Contributor
The Santa Monica-Malibu Unified School District saved more than $2.8 million to District taxpayers through the refunding of the District’s Election of 2006 General Obligation Bonds, Series A (“2006 Bonds”), according to the District.
“Refunding” (or refinancing) bonds is similar to refinancing a home mortgage.
Homeowners refinance their home mortgages for lower interest rates, ultimately saving money by reducing their monthly mortgage payments and/or shortening the years of mortgage debt.
Similarly, refunding the District’s 2006 Bonds will reduce the overall cost to the community and taxpayers through lower interest rates, without extending the terms of the original bonds.
Bond refundings generate savings that go right back to taxpayers in the form of decreased property tax bills.
The process and associated work typically requires two to three months for District officials.
The District Administration completed the work for the transaction and our local Santa Monica and Malibu taxpayers will receive the savings. 100% of the savings will go back to taxpayers and not one penny to the District.
“We are excited to provide our taxpayers with over $2.8 million in property tax bill savings. We believe it is our responsibility as stewards of public dollars to take advantage of this bond refunding opportunity,” said Janece Maez, Assistant Superintendent of Business/Fiscal Services and Chief Financial Officer for the District. The District was represented in the refunding by Tony Hsieh of Keygent, LLC. Mr. Hsieh advises California school districts on financing issues.
During the financing process the District also received updated credit ratings from both Moody’s Investor Service and Standard & Poor’s.
The District’s updated credit ratings of Aa1/AA are among the best for California school districts and allowed the District to garner significant investor interest and, therefore, very low interest rates.