On August 3, 2017 the Scotts Valley Unified School (District) completed the sale of its remaining $20 million in “Measure A” General Obligation Bonds that will provide funding for the completion of the middle school.
The vast majority of California school bonds are paid off within a 25-year time frame and with a total bond repayment ratio of 2 to 1, meaning that for every dollar of bonds sold the community will repay a dollar in interest.
The new Scotts Valley Unified School District bonds are structured with a repayment period of only 15 total years and a total debt repayment ratio of 1.12 to 1 meaning that for every dollar sold, it was only .12 cents in interest! The District was able to take advantage of its very strong credit ratings and historically low interest rates to significantly reduce the community’s future debt liability.
“We refinanced the high school bonds a few years ago to take advantage of lower rates and without extending their term,” said Michael Shulman, Board President. “Choosing a shorter term bond was another opportunity to be smart about how we manage public finances. I’m grateful that our finance team brought the option forward.”
The District and its Financing Team estimate that the new repayment structure will save the Scotts Valley community approximately $6 million in unnecessary interest costs, and most importantly, still allow the District to keep the Measure “A” tax rate below the maximum amount presented to voters.
The District estimates that the new maximum tax rate will not exceed $53.80 per $100,000 of assessed value throughout the life of the Measure “A” bond program. At the time of the bond election in 2014, the District provided the community with a maximum tax rate of $57.0 per $100,000 of assessed value.
“Maintaining a level of trust with the community is not something to be taken lightly,” said Tanya Krause, Superintendent. “The District told the voters we’d stay under a certain tax rate in 2014. I’m proud to report that we are far below what the District told voters that rate would be.”