Bonita Unified to Refinance Bonds Following Interest Rate Decline
The district aims to reduce long-term debt costs by refinancing bonds amid lower interest rates
Bonita Unified School District plans to refinance a portion of its outstanding bond debt after a decline in interest rates, a move district officials say could reduce repayment costs by about $1.3 million.
The refinancing, projected to close in early May, follows a 0.59% decline in interest rates and applies to bonds issued in 2014 and to two 2016 issuances tied to Measure AB, which was approved by voters in November 2008. The Bonita Unified Board of Education unanimously approved the refinancing at its Feb. 4 meeting.
Homeowners could see a slight decrease in property tax bills, though the exact amount will vary based on assessed value and future growth.
“As a rough estimate, the first year of savings is about $160,000, which translates to roughly $1.17 per $100,000 of assessed value,” explained Sonia Gomez Eckley, BUSD's assistant superintendent, business services, in an email.
Based on current projections, Gomez Eckley said a homeowner with the district’s median assessed value of about $502,835 would save approximately $5.86 in the first year, beginning in the 2026-27 fiscal year.
While refinancing may reduce future interest costs, taxpayers have already paid millions in interest on the bonds over the past decade and will continue repaying the remaining debt through property taxes into the 2030s.
Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association, said refinancing bonds typically results in modest savings for individual taxpayers but can reduce overall costs over time.
“Down is better than up for taxpayers,” Shelley said.
The refinancing process, known as issuing refunding bonds, allows the district to secure lower interest rates without extending the repayment term. According to an April 30 news release from the district., the refinancing will reduce total debt service payments while maintaining the current payoff schedule. The refinancing will not generate additional revenue for the district.
Shelley explained that local school bonds are repaid through property taxes over many years, often costing significantly more than the original amount borrowed once interest is included.
“They should be used the way you would pay for a mortgage on a house, for long-term investments where you’ll have something at the end when it’s paid off,” she said.
The Measure C and Measure AB bond proceeds were fully spent by fiscal year 2019, according to Gomez Eckley. About $64.2 million in Measure AB debt remains outstanding and is scheduled to be repaid by 2038, while Measure C is expected to conclude in 2031. While refinancing may reduce future interest costs, taxpayers will continue repaying the remaining bond debt through property taxes for years to come.
To qualify for refinancing, the district completed an updated credit rating with Standard & Poor’s and received an AA-rating.
Shelley pointed to the role of citizen oversight in tracking how bond funds are spent, noting that community members can serve on bond oversight committees to review expenditures and ensure funds are used as promised.
Residents interested in serving on school bond oversight committees can learn more through the Howard Jarvis Taxpayers Association website.
Disclosure: The editor has children who attend schools in the Bonita Unified School District.
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Staci Baird
Staci Baird
Staci Baird
Staci Baird
