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Committee Reviews Authority to Refund Laguna Honda Variable-Rate Bonds; Controller Notes Taxpayer Savings
Summary
The committee was briefed on an authorization to refund $120 million of Laguna Honda variable-rate general obligation bonds issued in 2005; the controller/budget analyst estimated a net present-value savings of about $15.6 million, reducing annual property taxes by modest amounts per household.
The Office of Public Finance told the Budget & Finance Committee that authority to refund or convert $120 million of variable-rate Laguna Honda general obligation bonds would allow the city to fix rates and lower borrowing costs after recent market and municipal insurance disruptions.
Nadia Sase, director of the Office of Public Finance, said the bonds were issued in 2005 as part of a $299 million authorized GO bond series and had performed well until recent market events prompted consideration of remarketing or refunding into fixed-rate debt.
The budget analyst noted an estimated net present-value savings of about $15.6 million and said the average annual reduction in property taxes for a single-family residence assessed at $500,000 (after the $7,000 homeowner exemption) would be roughly $37.34 per year. The committee had no public testimony on the bond item and closed the item after the presentation.
The committee proceeded to other agenda items after confirming the matter had been presented.
