CUSD expects to save taxpayers $7.9M

CARLSBAD — A prudent financial decision is paying off for the Carlsbad Unified School District.

The CUSD took advantage of historically low interest rates by refinancing a portion of the district’s 2006 Proposition P General Obligation Bonds, resulting in an unprecedented savings to taxpayers of $7.9 million.

The board of trustees was able to pursue this transaction without extending the term of the loan. By capitalizing on a favorable bond market, on average, the district will realize more than a 3 percent savings in annual interest rates over the next 15 years.

The board and district staff pursued this opportunity solely on the behalf of Carlsbad taxpayers. The school district will not receive any funds as a result of this transaction.

“When our fiscal services staff presents opportunities to save taxpayers’ dollars, our board seizes them,” said board President Claudine Jones. “Our staff has been very proactive in their efforts to find savings like these, despite the fact that no additional dollars will be going back into the classrooms. However, we recognize that these actions demonstrate good stewardship and help maintain our stellar credit rating, and those are always good things.”

Highlights of the refinancing plan include:

• $7.9 million in savings from 2017 to 2032

• Previous interest rate (average): 5.25 percent

• New interest rate (average): 2.14 percent

• All Bonds are straight interest (no Capital Appreciation Bonds)

• Does not extend maturity date of the loan

• 1.45 to 1 repayment ratios

The District has consistently pursued opportunities to benefit local taxpayers by refinancing eligible General Obligation Bonds. Since 2014, actions taken by the board of trustees will have saved taxpayers approximately $9 million through 2032.

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