Yorba Linda City Council reviews cybersecurity report; Placentia-Yorba Linda Unified School District refinances bonds to lower interest rate

 

Two topics merit attention this week: a cybersecurity assessment has been reviewed by the Yorba Linda City Council and a refunding of bonds previously issued by the Placentia-Yorba Linda Unified School District will save taxpayers some $71.5 million over the next 18 years.

The cybersecurity assessment, provided by a city-hired consultant, concluded that the city's “Network and security is strong within the organization. Based on the overall structure, as a grade, we would give it an A.” Cost of the assessment was $23,700.

In addition to the assessment, the consultant provided four recommendations for improvement, based on industry best practices and National Institute of Standards and Technology guidelines.

One recommendation is to periodically test the city's “incident response plan” by performing a “table-top exercise” and hire a forensic firm to provide on-call services to allow the city “to timely respond to a cyber attack, should one occur, to minimize vulnerability and loss.”

Other recommendations include providing oversight for risk management, compliance and internal controls; ensuring compliance with state requirements; and improving log management for storage for six months to two years, up from the current maximum 60 days.

Lower interest rates and a one-year sooner payoff date – 2039, instead of 2040 – on bonds refunded by the school district are responsible for the substantial $71.5 million in savings to taxpayers.

“The district refinanced the original par amount of $77.15 million at an existing 5.4% rate with $102.3 million of new debt at a 2.09% interest rate, which generated the large taxpayer savings,” stated officials. The difference in bond totals is due to accrued interest factors.

In 2019, the district also refunded previously sold bonds, notching $7.2 million in savings through a final payment scheduled for 2034. The new rate is 2.56% versus the old 6.61% rate.

The two refinancings represent about 43% of the district's outstanding general obligation bonds and included some of the bonds approved by district voters by Measure Y in 2002 and Measure A in 2008.

In a report to the district's elected trustees regarding this year's refunding, David Giordano, assistant superintendent, business services, stated: “By law, all benefits from the refunding will be delivered to the property owners in the district,” resulting in a lower tax rate for payers.

With the issue of the refunded bonds, the Wall Street bond rating agency Moody's Investors Service assigned a positive outlook with a rating of Aa2, up from Aa3 in 2019. The Standard and Poor's agency also assigned a positive outlook on its rating.

According to district officials, both firms have recognized the district “for strong financial management, particularly while the COVID-19 pandemic...and declining enrollment and increased cost pressures continue to be faced by school districts throughout California.”