COC’s E-Measure Bond Issuance Raises $70 Million
Funds to modernize and expand campus facilities
Officials for the Santa Clarita Community College district, which includes the College of the Canyons, announced that its third Measure E bond issue, sold in late October, raised $70 million with the goal of building the Canyon Country campus and to modernize the Valencia campus.
“Thanks to community support through Measure E, College of the Canyons continues to be well positioned to expand its programs and services to our students and local workforce,” said the Chancellor. Dianne Van Hook in a prepared statement.
“The improvements planned at both of our campuses will benefit our students, staff, faculty and the Santa Clarita Valley community for years to come,” she added.
Local voters approved Measure E in June 2016 for a total of $230 million to fund multiple projects on both campuses. The COC issued its first and second series of bonds and authorized a total principal amount of $50 million and $85 million in May 2017 and August 2019, respectively.
Local activist Stephen Petzold, a frequent critic of the college, said he was concerned about how it would affect owners and criticized the bond sale process. Other community members and students testified before the board in support of the issue, saying that these funds can improve COC facilities, to the benefit of students and the community.
Petzold said he was concerned if the district issued the remaining $95 million, the move would negatively impact landowners at a time of high inflation.
“They said you wouldn’t have to pay more than $15 per $100,000 of assessed value in 2016, just when the bond measure was approved,” Petzold said. “Legally they can break it and they could go up to $25 per $100,000 valuation.”
As part of the bond measure outline in 2016, district officials said they would do their best to maintain a property tax rate of $15 per $100,000 of assessment, which would be required to repay the bonds.
According to Sharlene Coleal, assistant superintendent and vice president of business services for the COC, for an average home costing around $800,000, that would be about $120 a year in property taxes.
Petzold said he couldn’t understand how the district would be able to deliver on that promise to ratepayers if it delivered the full $95 million without imposing a burden on ratepayers.
“They say it will stay below $15 per $100,000 of assessed value because what they are doing is borrowing the interest that will be due in tax year 23-24” , Petzold said. “They are praying that the increase in the projected estimated value will increase enough.”
David Casnocha, lawyer and bond adviser to the COC, said the plan was to finish the bond program this year and issue the remaining $95 million. Earlier this year, the District Board of Directors passed and authorized up to $95 million in bonds and for this process to proceed.
However, the board ultimately opted to issue $70 million instead of the $95 million after receiving additional information and data regarding an increase in interest rates, the projected tax rate needed to repay the bonds. and formulating an expenditure schedule.
“Against this backdrop, the District underscored its commitment to taxpayers when the bond measure was first passed that they expected a tax rate of $15 per $100,000 of value. taxable,” Casnocha said. “Board and staff really wanted to stay with a tax at or very close to that figure.”
“And it turned out that because of rising interest rates, we couldn’t conservatively predict a $15 tax rate if we sold the $95 million with the bonds. So we reduced the bond issue near the very end from $95 million to $70 million.
The district will seek to issue the final $25 million in bonds in the future, he added.
Casnocha also noted that reimbursement of Series A and Series B of Measure E is still pending. The combined tax to support all district bonds, Series A, Series B and Series C, is at or near $15 per 100,000 of assessed value, he said.
Measure E’s first and second issuances funded the construction of the Takeda Science Center. The approximately 55,000 square foot building is primarily devoted to the physical and biological sciences, housing eight laboratories and classrooms.
Measure E also funded the construction of the Student Services/Learning Resource Center, which is nearing completion at the Canyon Country campus. The four-story building is adjacent to the Takeda Science Center and will provide office space and a library on the Canyon Country campus, according to COC officials.
Additionally, the district also built a three-story parking structure on the Valencia campus, which added 1,659 parking spaces.
This third issue will go to the renovation of several existing buildings on the Valence campus. The funds will also support the construction of a new 25,000 square foot classroom and lab building that will replace two sections of modular buildings on the Canyon Country campus.
Eric Harnish, vice president of public information, advocacy and external relations for the COC, said the district will seek to use a portion of these funds to make improvements and stay compliant with the Americans with Disabilities Act. .
Coleal noted that district staff have received communications from students and other stakeholders indicating that they are excited to see this third edition. Students in particular want to be in these new or renovated facilities, she added.
Harnish said COC enrollment has been down, but “it’s not something that’s unique to community colleges because it’s something that all levels of higher education experience.” The COC’s current enrollment as of the 2021-22 school year is around 32,000 students, he added.
“Students are showing a preference to return to in-person classes, but there’s always a demand for online classes as well because of the flexibility it provides,” Harnish said.
According to Harnish, local voters in Santa Clarita approved three Measures for the college: Measure C in 2001, Measure M in 2006, and then Measure E in 2016.
“Looking back this far is important because it really shows the college’s commitment to protecting the taxpayer,” Harnish said. “We’ve refinanced bonds 44 times and it’s saved local ratepayers nearly $50 million.”
Coleal claimed the entire bond process, from start to finish, is “very scrutinized.”
The district works with multiple agencies such as the IRS, rating agencies, attorneys, financial advisers and the Los Angeles County Treasurer and Tax Collector to review all transactions, she added.
“There are a significant number of checks and balances that are built into the process of selling bonds — both during the sale and then as you spend the money,” Harnish said. “District ratepayers can be confident in this process.”