Refinancing Bonds Expected to Save Nearly $5 Million over 25 Years

In an ongoing effort to provide a safe, reliable water supply at an affordable price to its customers, Rowland Water District (RWD) is refinancing bonds issued in 2008. By restructuring the $20.55 million, the District expects to save nearly $5 million over the life of the bonds.

The funds were issued to finance expansion of the District’s recycled water system as a means to enhancing water reliability and conservation. Progressive stewardship such as this is vital to protecting water supplies in the extreme drought conditions California is currently experiencing.

The bonds will be refinanced from 6.33 percent to 3.91 percent, which will save the District approximately $190,000 each year for the next 25 years.  The savings allow RWD to maintain reserves, invest in future infrastructure, and ensure water supply reliability.  Urban Futures, the financial firm that handles RWD’s financial portfolio, indicated that now is the time to lock in lower interest rates at this substantial saving, as rates are likely to rise in the near future.

“We are always looking for ways to improve service and still keep rates low,” said Ken Deck, General Manager of RWD. “Our fiscal policy is geared toward long term strategies that make sense for the District and benefit our customers. Refinancing these bonds now allows us to save millions of dollars in interest over the life of the bonds. That’s a significant step in ensuring our financial future and making sure we are responsible to our ratepayers.”

RWD enjoys an excellent credit rating, and maintains a strong financial position. These factors made refinancing the bonds an easy task, said RWD’s financial advisor Michael Busch, CEO of Urban Futures.

“Ultimately, investors were willing to accept lower interest rates from the District’s bonds due to the credit strengths of RWD,” said Busch. “The groundwork for the successful sale of the District’s bonds came through the prior months of work by District staff and its finance team.”

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