A plan to refinance debt, approved by the Laguna Beach school board at a special meeting on Monday, will save Newport Coast property owners within the school district’s boundary about $100 on future property tax bills.
The figure is based on an estimated annual savings of $62,317, shared among owners of 567 parcels.
Issued in 2004 for the amount of $9.97 million, the 30-year bond is one of the school district’s two major debt obligations, both of which are paid through property taxes, said Dean West, assistant superintendent of business services. The other debt is comprised of the general obligations bonds that were issued in 2001 and 2003, for a combined total of $39 million, and also were refinanced to take advantage of declining interest rates in 2010.
Proceeds from the original 2004 bond, intended to offset costs from a growing student population due to home development within the district, were used for classroom space and improvements at El Morro Elementary School, Thurston Middle School and Laguna Beach High School.
“As in 2010, when the other debt was refinanced, this time period also has a good environment for municipal debt,” explained West. The savings is estimated at $1.4 million or 9.33 percent, over the life of the bonds, he said.
Given a Sept. 1 redemption date, the refinancing will take place shortly, so that the bonds issued in 2004 at an interest rate of 5.4 can be redeemed and the new bonds can be issued to investors at an expected rate of 4.3 percent.
To complete the refinance, the district assembled a team that includes Stone & Youngberg as underwriter, Stradling, Yocca, Carlson & Rauth as bond counsel and David Taussig and Associates as a special tax consultant.