The Coast Community College District Board of Trustees took the first step towards authorizing the refunding of voter-approved Measure M building bonds on Wednesday, September 16.
The decision, slated to be confirmed at the next Board meeting, is estimated to save local taxpayers $20 million. This combines with a similar refinancing in 2019 that saved taxpayers $13.5 million. In total, taxpayers are expected to benefit from more than $30 million in reduced costs as a result of historically low interest rates.
“When students return to our campuses, they will find places that are transformed by the investment local voters made in their future,” said Coast District Chancellor John Weispfenning. “It is our obligation as a District to maximize that investment and reduce costs for our taxpayers, and this refinancing plan achieves both of those goals.”
Refunding in the bond market is comparable to refinancing a mortgage, where a higher interest loan is substituted for a lower interest loan. In 2019, prior to the refunding, the community was paying an average interest rate of 4.40% on the bonds selected for program. As a result of the refunding, the District locked in a borrowing rate of 2.81% for taxpayers.
The Coast District does not collect the savings, rather these savings are used to shorten the tax liability for the local community. The bonds are repaid sooner through refunding, shaving years off of the repayment period.
“The taxpayers expressed faith in the Coast District’s ability to manage their investment responsibly,” said Dr. Andrew Dunn, vice chancellor of finance and administrative services. “Our facilities and finances teams have done so, and we take the next step towards even greater efficiency with the action of the trustees today.”
This article was released by the Coast Community College District.