Bond Refinancing Saves Talega Taxpayers Millions

LAS FLORES, CA (July 9, 2007) – Some savvy financial maneuvering by the Santa Margarita Water District (SMWD) is saving residents in the Talega planned community $4.5 million on their property tax bills.  The average Talega household will save about $85 per year thanks to the District’s recent refinancing of improvement bonds issued in 1999 and 2003.

“We are constantly looking for ways to save our customers money and to be the best stewards of both our water resources and our customers’ best interest,” said SMWD General Manager John Schatz.  “This refinancing was a great way to do both.”

Sale of the refinancing bonds closed on June 20, 2007.  With a good credit score and an AAA insurance rating, SMWD secured lower interest rates – an average of 4.5 percent versus an average of 6.0 percent on the older bonds – without extending the life of the bonds.  This brought about a savings of $4.5 million that the District is passing on to taxpayers – about $1,200 per household over the life of the bond. 

“With the right market conditions in place, this proved the perfect opportunity to save our Talega customers money,” said Schatz.

Bond funds pay for water and sanitation improvements installed with the construction of Talega, such as pipelines, reservoirs and pump stations throughout SMWD’s Talega improvement district.   Funds also are used to increase supply reliability and reduce operating costs.

In the past, SMWD has carried out similar refinancing of bonds to bring savings to residents throughout its service area.  Most recently, the District refinanced bonds in 2004, saving residents of Rancho Santa Margarita and nearby areas nearly $14 million.

SMWD operates eight strategically located improvement districts within its service area.  Each improvement district functions as an independent unit, allowing capital improvements to be funded by improvement bonds specific to that improvement district.  As a result, residents in long-established neighborhoods, such as those in Mission Viejo (improvement district #1), don’t have to pay for service extensions to newer communities like Talega (improvement district #7).

About the Santa Margarita Water District
The Santa Margarita Water District is Orange County’s second-largest water district, serving a customer base of more than 155,000 residents and 2,000 businesses in Mission Viejo, Rancho Santa Margarita, Coto de Caza, Las Flores and inland southern Orange County, including Ladera Ranch and Talega. 

 Santa Margarita Improvement Districts