WATSONVILLE -- Pajaro Valley school leaders are looking at refinancing nearly $27 million in bonds to save taxpayers more than $1 million.
The refinancing proposal, which district officials say is attractive due to historically low interest rates, comes as the district attempts to pass a $150 million school bond on the Nov. 6 ballot.
Tim Carty of San Francisco-based Piper Jaffray told the board the average interest rate of 5.25 percent on the existing bonds could be cut to 2.28 percent without extending the length of the loan.
The time to act is now, Carty said.
"It's hard to imagine (interest rates) going lower," he said.
Fees for legal services and to the rating agency and Piper Jaffray would run about $400,000 and would be rolled into the new bonds, Carty said. He estimated the district would net $1.1 million to $1.3 million in savings, money that would come off property tax bills.
District trustees expressed hope that the savings would have a positive impact on voters going to the polls to decide the proposed bond, Measure L.
"It should strengthen the case for Measure L. It's one of several examples of our good financial stewardship," said board President Leslie DeRose, mentioning a district energy management program that's saved nearly $2 million in four years as another instance.
The debt is a portion of the $57 million in Measure J school bond, passed by voters in 2002. Only certain bonds issued in 2005 are eligible for refinancing, Carty said.
The bonds will be paid off by 2022 with or without refinancing.
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