July 23, 2013 > Sale of 2013 General Obligation Refunding Bonds means lower taxes
Sale of 2013 General Obligation Refunding Bonds means lower taxes
Submitted By Harriet Commons
In 2002, Fremont voters passed Measure R with an affirmative vote of 74.4% of the votes cast (only two-thirds were needed) to approve an override tax to pay debt service on $51 million in Fire Safety Project General Obligation (GO) Bonds, the proceeds of which were used for the replacement or retrofitting of 10 fire stations and the construction of police and fire training facilities. The bonds were issued in three series: Series A for $10,000,000 on July 17, 2003, Series B for $25,000,000 on April 14, 2005, and Series C for $16,000,000 on February 11, 2009.
The Series A bonds were subsequently refunded on May 10, 2012, resulting in a net present value savings of $925,914. On July 9, 2013, the City sold GO bonds to refund the existing Series B bonds. All of these bonds have maintained an AA+ rating from Standard & Poor's. Through a competitive bid process, the City obtained a very solid refunding, with present value savings of 7.67% or, in dollars, over $1,698,000. The future value, meaning the actual dollars, savings are over $2,476,000, and the annual savings average is about $113,700.
These savings are and will be passed along to Fremont property owners through a decrease in the override tax levy to repay the bonds. Through the timing of this sale on July 9, 2013, the City will be able to reflect this lower interest cost in the calculation for the Fiscal Year 2013/14 tax levy.