The Santa Monica-Malibu Unified School District recently locked in savings of more than $4.2 million for local taxpayers by refinancing Measure BB bonds approved by voters in 2006.
The District took advantage of the historically low interest rate environment and replaced bonds with an average interest rate of approximately 4.73 percent with new bonds at an all-inclusive interest rate of 3.05 percent.
All of the savings from the refinancing will be passed back to District taxpayers in the form of lower property tax bills. The refinancing did not extend the term of the original bond payments.
“Our community has supported us time and again. We owe it to our taxpayers to lower the burden whenever possible,” Jan Maez, chief financial officer, said. “When market conditions allowed us to significantly lower the interest rate, our Board of Education did not hesitate to pursue the opportunity.”
The District was able to lock in aggressive interest rates by securing ratings of ‘Aa1’ and ‘AA’ from Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively. These ratings distinguished the District’s bond offering from other municipal bonds in the marketplace and helped secure strong investor demand.
In February 2013, the District completed a similar bond refinancing and passed on the savings to local taxpayers. That refinancing saved District property owners more than $2.8 million through 2032. With this recently-completed refinancing, total savings to taxpayers since 2013 exceed $7.1 million.
Measure BB is a $268 million bond used for safety and security upgrades, repair and renovation to all school sites in the district, and provided for some computer and technology upgrades prior to the approval of the $385 million Measure ES general obligation bond in 2012.