MCKINLEYVILLE- The McKinleyville Union School District voted Wednesday on an option to refinance a portion of a bond measure issued in 2011.
The Capitol Appreciation Bonds in other school districts have been controversial, because the slow repayment plan on the bond increases in size the longer it takes to pay off the loan. In 2011 the district took out $4 million in CAB bonds, but were able to refinance the bonds at a lower rate later in time. If the school did not refinance, the bond would total $53 million by 2050.
"It's really unfortunate that we have to ask tax payers in the year 2049 for new roofs today," said the President of the board, Brian Mitchell.
On Wednesday's special meeting, the district had four refinancing options. One allowed the district to pay off the bond and save the district money over time, but forced homeowners to pay a higher tax rate. In a four to one vote, the district chose an option that paid the debt off over time, but put less of a burden on tax payers said Mitchell.
"A lot of people have mortgages on their homes and it would generate a lot of saving if they did a ten year mortgage of a 15 year mortgage, but unfortunately the payments just become out of the reach of most people," he said.
Under the decision the school board will ultimately pay $36 million dollars, $16 million less than if they did not refinance.