The Merced Community College District will save more than $2.5 million in tax dollars from the refinancing of a 12-year-old bond, Merced College announced.
With refinancing, the district reduced the average interest rates on its bonds, lowering the community’s tax bill by an average of $161,000 per year for 16 years, a savings of $2,588,884, according to a press release.
The bond came from Measure H, which was passed by voters in 2002.
“Under the leadership of our board of trustees, we have taken advantage of historically low interest rates to refinance bonds from its Measure H bonds without extending the life of the bonds,” Vice President of Administrative Services Joanne Schultz announced Monday in the release.
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The district’s ability to get low interest rates and save money was boosted by its positive credit rating, the release stated. The rating takes the district’s location and money managing policies into account.
Schultz, President Ron Taylor and Director of Business and Finance Joe Allison made a presentation of the district’s management, financial performance and local economic factors to a rating agency, Moody’s Investors Service. The firm gave the district an Aa3 rating, the fourth highest.
The rating and market conditions allowed the district to attract investors and get lower interest rates for refinancing the bond, Schultz said.
The district will not receive any part of the savings, the release stated, but the refinancing is expected to save tax dollars. Merced College pursued the refinancing to benefit local taxpayers, according to Schultz.