Yorba Linda's Redevelopment Agency bonds to be refinanced to lower interest costs; Y.L. Water District $35.5 million portfolio earns interest

Two interesting money matters to report this week:

First, Yorba Linda is still dealing with finances related to the city's Redevelopment Agency that was dissolved by state mandate five years ago after 29 years of collecting the increases in property taxes resulting from higher land values in areas designated for economic renewal.

Latest action involves refinancing bonds sold in 1993, 2005 and 2011 for an anticipated $1.63 million in savings each year through 2031, “an overall 37 percent reduction in debt service as compared to the existing payment schedule,” reported Finance Director Scott Catlett.

Issuing refunding bonds has been approved by the City Council and a separate oversight board and is now awaiting approval from the state Department of Finance, expected next month. Savings includes unspent portions of the agency's final bonds that were approved for sale in 2011.

Interest rates are expected to drop from a current 5 percent to 6.35 percent range to 3.5 percent and 3.8 percent for $42.6 million in outstanding bonds. Some $6.8 million in 1993 and 1998 bonds “did not meet the savings requirement to justify a refinancing,” Catlett stated.

Savings “will accrue to all of the taxing entities that benefit from excess tax increment generated by the former redevelopment project areas,” Catlett noted. Entities include the city, school and water districts and several county agencies.

Redevelopment areas once included 2,640 acres in the Savi Ranch business development and Hidden Hills residential on the eastend and 344 acres in the Town Center and Imperial Highway commercial zoning on the westside.

Second, some $35.5 million in cash and the investment portfolio held by the Yorba Linda Water District is earning an average 1.05 percent yield, according to a report viewed at a May 23 meeting by the district's five elected directors.

April interest on the portfolio was $43,533, with the January through April earnings totaling $279,289, according to a report prepared by the district's senior accountant Kelly McCann.

Most of the money is in two pooled investments: $18.9 million with the Investment Trust of California, created by the California State Association of Counties and League of California Cities, and $5.5 million with the state treasurer-administered Local Agency Investment Fund, for a total 1.15 percent return.

Other earnings: 0.13 percent for $3.1 million in US Bank and Bank of the West money market accounts; 1.05 percent for nearly $1 million in Federal Home Loan Bank securities; and no interest on about $575,000 in Wells Fargo Bank and Pershing checking accounts.

And some $6.4 million is held in certificates of deposit at 27 different banking institutions, earning an average 1.22 percent interest. Most accounts are just under the $250,000 insurance threshold, with interest rates ranging from 0.74 percent to 2.43 percent and maturities from this year into 2022.