Bond refinancing nets larger-than-anticipated savings for customers
The move will reduce District expenses by more than $4 million
October 13, 2021 – Rowland Water District has completed a bond refinancing that will save money for customers by reducing expenses by more than $4 million over the next 20 years.
To take advantage of historically low interest rates, the Board of Directors authorized the refinancing of existing bonds during a July 2021 meeting. At the time, the refinancing was expected to save $3.4 million. But as market conditions improved, the District increased the offering and refinanced a total of almost $36.2 million in existing bond debt, generating an additional $600,000 in savings.
The cash flow generated by the refinancing will be used to reduce the District’s pension liabilities through the California Public Employees’ Retirement System.
“We’re excited to take advantage of this opportunity to provide long-term financial benefits for our customers,” said Rowland Water District General Manager Tom Coleman. “The District will enjoy significant cost reductions in the next few years, with continued improvements to the bottom line over the next two decades.”
The refinancing paid off older bonds used to fund the California Domestic Water Company interconnection project, which provided an additional source to access imported water and improve supply reliability. Other project bonds covered the 2008 expansion of the recycled water system and the La Habra Heights County Water District connection, which allows direct access to groundwater and reduced Rowland Water District’s reliance on imported water by 20%.