District Sells Last Measure C Bonds, Achieves Tax Savings
Foothill-De Anza Community College District has reached a major milestone in its Measure C capital improvement program with the sale of its final series of bonds. Authorized by district voters in 2006, the $490.8 million bond program has transformed the Foothill and De Anza college campuses by funding essential infrastructure upgrades, repairs and renovations to existing buildings, and new construction.
“We appreciate voters’ support for creating a truly outstanding and environmentally sustainable learning environment for our students and community,” said Chancellor Judy Miner. “The district is committed to being an excellent steward of the colleges and the taxpayers’ investments in them.”
Lower costs for taxpayers
With the sale of the final series of bonds this fall, the tax rate for retiring Measure C bond debt is significantly lower than the district’s projection when it placed Measure C on the ballot. The original estimated tax rate was $24 per $100,000 of assessed property value. The district now projects a rate of $14.55 per $100,000 for all outstanding Measure C debt, which means lower costs for property owners.
The lower tax rate is the result of a combination of things, according to district Vice Chancellor of Business Services Kevin McElroy. Contributing factors include historically low interest rates and increases in property valuations in the district’s service area as well as the district’s strategic practices of selling bonds at opportune times over the past decade and periodically refinancing the debt to maximize taxpayer savings.
The Sept. 28 sale of $56.4 million in new bonds met with strong investor demand. At the same time, the district also refinanced $201.7 million in older Measure C bonds. These sales resulted in a total debt service savings of $32.4 million for taxpayers. That amounts to a savings of $1.4 million a year through 2040 or an annual average reduction for property owners of 54 cents per $100,000 of property value.
Previously, the district refinanced Measure C bond debt in 2014 and 2015 to take advantage of significantly lower interest rates. Combined with the 2016 bond refunding, this has saved property owners a total of $48.98 million in debt service.
“We have been conscientious about taking every available opportunity to reduce taxpayers’ debt payments in appreciation for our community’s longstanding support of the district,” Chancellor Miner said.
Strong financial management
John Sheldon, representing district bond underwriter Morgan Stanley, attributed strong investor demand for Foothill-De Anza bonds to the upgrading of the district’s credit rating by Moody’s Investor Service and Standard & Poor’s to Aaa and AAA, the highest possible ratings. He said these credit ratings reflect the district’s strong financial profile, including its sound management of financial resources and the area’s strong and growing tax base.
Measure C accomplishments
Measure C funds have enabled the district to move forward over the past decade to meet such needs as replacing leaky roofs; renovating classrooms, laboratories, and offices with the addition of updated electrical, heating and ventilation systems; construction of modern science facilities; installing energy management systems to reduce operating costs; upgrading the computer network and enhancing security system; improving access for people with disabilities; upgrading fire safety systems, signage and lighting; and constructing and integrating modern technology that is critical for delivering quality instruction and services to students.
Posted Dec. 14, 2016