The Torrance Unified School District recently refinanced $31 million in general obligation bonds which will save District property owners more than $5.6 million in taxes. The District took advantage of interest rates that were near all-time lows to refinance its Election of 2008 Series 2009B-2 Bonds. The 2009B-2 Bonds originally sold in October 2009 when interest rates were higher.
The 2008 Election Bonds, Measures Y and Z, were approved by nearly 75% of the District’s voters authorizing the sale of $265 million in General Obligation Bonds. The prior bonds were sold to finance District-wide modernization of all schools, and repairs to roofs, plumbing and electrical systems, as well as other capital improvement projects.
Interest rates on the old bonds were 4.78%, and the borrowing cost for the new bonds is 2.79%. This difference will save District property taxpayers $5,612,167, or about $375,000 a year through the year 2034.
A part of the sale process involved getting a credit rating on the District’s bonds. The District received a strong “Aa2” rating from Moody’s Investors Service, which helped the District achieve its low interest rates. Moody’s praised the District in their report for its “very large and growing tax base characterized by a high level of resilience, healthy financial position through conservative management, and a large financial operation able to weather economic pressures”.
TUSD Superintendent, Dr. Mannon, stated, “With interest rates the lowest they have ever been, we wanted to take advantage and lock in savings as quickly as possible.” Board President, Martha Deutsch, added, “Our community has always entrusted us by supporting our bond measures, and as stewards of taxpayer dollars, we felt this refinancing was the right thing to do.”
The refinancing of the bonds was unanimously approved by the TUSD Board of Education on July 18, 2016. Property owners in the District will see a reduced property tax rate on future tax bills.