On October 24, 2011, the Butte-Glenn Community College District Board of Trustees passed a resolution that authorized the Butte College Administration to pursue refinancing its general obligation construction bonds. On February 2, 2012, Butte College took advantage of historically low interest rates by successfully refinancing $23.8 million in previously issued and outstanding voter-approved bonds.
The refinanced bonds were a part of the first series of bonds issued under the bond measure voters approved in March of 2002. The original 2002 bonds (Series A) carried an all-in interest cost of 5.1 percent. The new refinanced bonds have an all-in interest cost of 2.3 percent.
"Through refinancing efforts, we will collectively save Butte and Glenn County property owners, residing in the district, over $5.6 million through 2026," said Dr. Kimberly Perry, Butte College President. "In tough economic times as these, we are doing everything we can to save taxpayers money."
Several key factors led the college to refinance its bonds which included the District's strong credit rating, the community's tax base, conservative and resourceful fiscal management, and favorable market conditions.
During economic downturns when the assessed values of properties within the district are in decline, the tax burden would increase in order to cover the debt service requirements of the issued bonds. By refinancing the Series A bonds, the debt service is reduced, and in turn protects the taxpayers from this increased tax burden. With the new refinanced bonds, the Butte-Glenn Community College District believes it will be able to maintain its promise to the voters of no more than $20.88 per $100,000 of assessed value.
Proceeds of the Series A bonds were issued to finance the acquisition, construction, reconstruction and modernization of certain property and District facilities, as specified in a list submitted to and approved by the voters of the District. None of the $5.6 million will go to the District as all savings will be used to offset taxpayer costs over the life of the bonds.