The Victor Valley Union High School District has announced the refinancing of its existing capital appreciation bonds (CABs), a move that will save local taxpayers more than $130 million.
The significant taxpayer savings were part of a presentation delivered by VVUHSD Assistant Superintendent of Business Services Brian Hawkins last week at the most recent meeting of the VVUHSD Board of Trustees.
As VVUHSD received an upgraded credit rating from Moody’s in the spring, VVUHSD fiscal staff was able to refinance existing general obligation bonds for $6.6 million in taxpayer savings, then saw an even bigger opportunity for savings with the CABs.
“Due to the low interest rate environment and the district’s increased credit rating, district staff began exploring the possibility of reducing other outstanding debt obligations of the district,” Hawkins’ presentation stated on Oct. 19.
The CAB bonds, taken out by the district in 2013, were refinanced and converted into current interest bonds (CIBs). This not only takes $130.3 million off the overall amount that property owners in the district boundaries will pay, it also cuts 14 years’ worth of debt service payments.
“Mr. Brian Hawkins and his staff are to be commended on what they have achieved for our district, as well as our taxpaying property owners,” board member Rosie Hinojos said after the meeting. “This is certainly good news not only for our district but also for our community.”
Before the refinancing, the bonds would have been paid off in 2052. They will now be paid off by 2037, district officials said.
Board President Penny Edmiston said the financial accomplishments of the past year show that VVUHSD “continues to move in a positive direction,” and she praised VVUHSD fiscal staff for “putting students first” by also finding funding for a new gymnasium at Hook Junior High School and a new multi-use building at Victor Valley High School.
“The entire board is very appreciative of Mr. Hawkins’ efforts,” Edmiston said.