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Meeting Date:
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3/26/2012 - 6:45 PM
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Category:
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Consent Agenda
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Type:
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Action
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Subject:
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9.16 (Item #18) Resolution Confirming Costs of Sale Respecting Issuance of Mt. Diablo Unified School District General Obligation Refunding Bonds, 2002 Election, Series B-2
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LCAP (Local Control Accountability Plan) Goal:
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Enclosure
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Resolution
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File Attachment:
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Summary:
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Consideration of a Resolution confirming the costs of issuance of the recently sold General Obligation Refunding Bonds, 2002 Election, Series B which were issued in order to decrease the interest rate and generate tax payers’ saving on a portion of the District’s General Obligation Bonds, Election of 2002, Series 2004.
On March 7th Mt. Diablo Unified School District refinanced outstanding bonds from the Election of 2002, totaling $42,750,000, and as a result will save taxpayer money. Much like a home refinancing for lower payments, the District’s Financial Advisor saw an opportunity to refinance bonds at lower rates for lower bond payments. The interest rate on the bonds before the refunding was 5.00% and after the refunding the new interest rate is 3.78%. As a result District will save over $4.6 million in total interest cost over the remaining life of the bonds. This savings will be passed directly to the District’s taxpayers.
Leading up to this refinancing was a large drop in bond interest rates that started in late 2011 and culminated with historically low interest rates in February of 2012. In February, the District decided to take advantage of the low interest rate environment and refinance the existing bonds. To lock-in these low rates the District had to move quickly. The District, the Financial Advisor, and other professionals laid out a refinancing plan and shared it with Contra Costa County. The County provided input and worked with the District to make the refinancing a reality. Without the hard work of everyone involved to get the refinancing complete in a timely manner, the $4.6 million in taxpayer savings might not have been realized.
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Funding:
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N/A
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Fiscal Impact
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No impact on the District as all of the costs of the bond sale were paid from moneys raised through the sale of the bonds. The taxpayers within the District will appreciate a decrease in the tax levy to pay debt service on the District’s bonds as a result of the bond sale.
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Recommendation:
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Adopt resolution 11/12-35 as presented.
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Approvals:
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Recommended By:
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Signed By:
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Loreen Joseph - Secretary to the Superintendent
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Signed By:
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Steven Lawrence - Superintendent
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