In Nov. of 2008, 66.5 percent of Susanville School District voters approved Measure “S,” a $9 million GO Bond. The bond (along with $4 million in matching state funds) via the School Facilities Program, covered the expense of completing many vital projects to allow students to return to classrooms at Diamond View School.
Measure “S” is now eligible to be refinanced — and given current market conditions, the district could “refund” most of that principal to realize savings in excess of $750,000.
Similar to replacing a 30-year home mortgage with a 15-year mortgage after a number of years, refunding school district General Obligation bonds generally reduces tax rates by replacing existing 25-year bonds with new, lower interest rate 15-year bonds.
This refunding could save local taxpayers approximately $750,000 in total – or, on an annual basis, an average of around $7 per $100,000 of taxable property value from 2020 through 2033.
Eastshore Consulting is a financial advisory firm that works with districts throughout the Sierras and the rest of California. On Nov. 20, the firm delivered a presentation to Susanville School District about potentially refinancing.
The refinancing would refund approximately $4.2 million of its outstanding bonds from Measure “S.”
Measure “S” has more than $2.3 million in bonds remaining to be issued; however, the funds are not accessible for the foreseeable future due to tax rate limits.
While the Measure “S” bonds previously issued did allow the district to access considerable state matching dollars and completely rebuild Diamond View Middle School, underlying assumptions about tax base growth utilized at that time were not realized, particularly due to the recession.
As such, any new issuance from Measure “S” would be inefficient and require more costly Capital Appreciation Bonds.
Eastshore advised the district not to try to access any portion of the remaining authorization.
“Particularly given where we stand with Measure ‘S,’ the board and I are extremely happy to have the opportunity to move forward with this refunding,” said Superintendent Jason Waddell.
“We owe such gratitude to the Susanville community. Of course we’ll do everything we can to save our taxpayers some money – and moving forward, we are committed to continuing to be good stewards of their investment.”
Legal documentation to proceed will be considered at the Dec. 18 board meeting.
Should it be adopted, the district will move forward with whatever issuance process is most advantageous and generates the largest amount of savings for the community.