Felton residents will likely see a decrease in their property taxes next year, as the Santa Cruz County Board of Supervisors recently voted to significantly lower the interest rate on bond debt incurred by purchasing the town’s water system.
Fifth District Supervisor Mark Stone announced Nov. 20 that the county had refinanced $9.5 million in outstanding bond debt related to the voter-approved 2008 purchase of the water system from California American Water, a subsidiary of the New Jersey-based American Water Works Co.
The 30-year bond, originally structured at a 5.1 percent interest rate, was reduced to 3.4 percent by refinancing. That change translates into a property tax reduction of about $60 annually for Felton residents.
“Over time, they’ll be paying a bit less money,” Stone said. “It takes everyone’s annual payments to less then $500.”
Property tax bills will reflect the reduced interest rate next year, as this year’s were sent out in November, Stone said.
He said the process of refinancing began a month ago, when bond interest rates declined enough to warrant such action. County supervisors voted Oct. 30 to move ahead with the refinancing.
“It was a great time to step in and provide some additional benefit,” Stone said.
The original $11 million bond measure was passed by Felton voters in 2005 to purchase the water rights to the town, driven in part by Stone and the group Friends of Locally Owned Water.
“We were watching the interest rates, and it’s a matter of refinancing the bonds,” Stone said. “We were able to drop the tax rate significantly for the people of Felton.”