Marysville Joint Unified School District will consider refinancing a 2014 general obligation refunding bond in hopes of saving money for district taxpayers.

On Tuesday, the Marysville Joint Unified Board of Trustees will vote on a resolution to authorize the issuance of up to $23 million in refunding bonds, which according to district officials, “are similar to refinancing a home mortgage.”

The State Treasurer’s Office explains that refunding bonds are issued to refinance a prior issue of bonds at a new, lower borrowing rate or under a new financing structure. These bonds are typically issued to achieve debt service savings, which are passed on to taxpayers in the form of lower property taxes.

“(Refunding bonds) are general obligation bonds that the public is already paying on. What we’re doing is we’re getting ready for interest rates to drop, and then we can refinance the remaining amounts due on Measure H,” Assistant Superintendent of Business Services Jennifer Passaglia said. “It’s similar to refinancing your mortgage, but we refinance at a lower interest rate that will save the taxpayers money and help pay down our existing obligation.”

In 2006, district voters authorized Measure H, a $37 million general obligation bond that contributed to facility renovations throughout Marysville Joint Unified. The property tax levy was set at $57 per $100,000 in property value. Measure H was issued in two series and was refunded in 2014, the district said.

According to district officials, there is an opportunity to refund all or a portion of the 2014 general obligation refunding bonds for their remaining lifespan. However, Passaglia said that the district will only move forward with this opportunity if the market allows for it.

“We will only do it if we can. There’s a certain amount that we want to save. It's not worth our time and effort if it's not going to save taxpayers if it’s not at a certain interest rate level,” she said. “If interest rates hit that level – and it seems like they’re dropping – then we can go out and refinance.”

Based on current market rates, officials estimate a refunding would generate taxpayer savings of $658,995 over the remaining life of the bonds.

California general obligation bonds are currently benefiting from increased investor demand as a result of bond redemptions, which typically occur each summer. According to district officials, many bondholders are looking to reinvest available cash back into the municipal market by purchasing new bond issues.

According to the proposed resolution, each series of refunding bonds will be issued in denominations of $5,000 in principal with an interest rate of no more than 8% per year. Proceeds from the refunding bonds would be used to refund a portion or all of Marysville Joint Unified’s outstanding 2014 bond.