SONOMA -- The Sonoma Valley Health Care District, which oversees 83-bed Sonoma Valley Hospital,  announced it has completed refinancing of the 2009 general obligation bonds, resulting in a $2.36 million reduction in interest paid on the bonds.

“This is a substantial savings for Sonoma property owners who pay for the bond through their property taxes, as all of the tax benefits go directly to taxpayers; there’s no direct benefit to the hospital,” Board Chair Sharon Nevins said in a statement.

Refinancing the GO bond was a priority, according to Ms. Nevins, because when they were issued in 2009, bond interest rates were at a high point. The bonds were sold with a five-year option to refinance because it was believed rates would be lower in five years. “This is exactly what happened and the board was quick to take advantage of it," she said.

The transaction was completed on February 4 and involved the sale of nearly $12,500 in Sonoma Valley Health Care District General Obligation Refunding Bonds. The final interest rate for these bond was 3.78 percent, which produced a total savings, after adjusting for costs of issuance, of more than $2.36 million

District property owners voted to approve a general obligation bond in 2008 to allow the hospital to upgrade the facility to meet California seismic standards while covering the cost of new construction and equipment. The work has been completed. The bond was supplemented by the $11 million recently raised by the community campaign to fund the hospital’s new wing, which includes a new emergency department and surgery center.