Santa Cruz City Schools is taking advantage of historically low interest rates in the municipal market to refund outstanding bonds. Similar to a home refinancing, refunding  allows the District to lower debt service obligations in connection. The District priced the refunding bonds on April 23rd using a competitive sale process. Robert W. Baird & Co. was selected as underwriter because their bid had the lowest true interest cost for the bonds (among eight total bids for the elementary school district bonds and among six total bids for the high school district bonds).

For the elementary school district, the District will be able to issue refunding bonds with a true interest cost of 2.59%. The refunding will generate savings of over $2.3 million on a present value basis (or 13.2% of the refunded bond amount). On an annual basis, debt service obligations will be lower by approximately $175,000, representing a reduction in taxes every year of approximately $7.50 for the typical homeowner.

For the high school district, the District will be able to issue refunding bonds with a true interest cost of 2.58%. The refunding will generate savings of over $5.4 million on a present value basis (or 15.3% of the refunded bond amount). On an annual basis, debt service obligations will be lower by approximately $410,000, representing a reduction in taxes every year of approximately $9.15 for the typical homeowner.

The realized savings from the refunding bond issue flows to District taxpayers and represents the commitment by trustees to represent the interests of the community and its taxpayers.