Taking advantage of favorable interest rates, the Foothill-De Anza Community College District has refinanced general obligation bonds that were issued in 2012 and 2014 as well as a portion of bonds issued in 2016 by selling $157.76 million of general obligation refunding bonds. In doing so, the district announced, it has saved district taxpayers $26.6 million.
"This results in a present value savings of 14% of the amount of the refunded bonds, which significantly exceeds the 5% minimum savings threshold recommended as a best practice," District Vice Chancellor Susan Cheu said in a statement.
Funds from the bonds, sold under the voter-approved Measure C, have gone into updating the district's facilities: replacing leaky roofs, renovating classrooms and laboratories, upgrading the heating and ventilation systems, building new modern science facilities, and making the campus more accessible for people with disabilities.
In addition to the refinancing of Measure C bonds, the district also recently sold $110 million of general obligation bonds from Measure G, which was approved by district voters last year by 58.8%.
Bonds require an increase in local property taxes, which will be used to repay with interest the investors who've bought the bonds. Property owners are paying a tax of $16 per $100,000 of assessed property value to reimburse the bond investors. With Measure G, the district is allowed to issue $898 million in bonds in order to renovate Foothill-De Anza's facilities and potentially pursue affordable housing projects for students and district employees.
"This is wonderful news for the district and for local taxpayers," District Chancellor Judy Miner stated in a May 5 press release. "We appreciate voters' support for Measure G and their confidence in the district's fiscal stewardship. The district will continue to invest in outstanding university transfer and workforce preparation programs that will contribute to an equitable economic recovery in the region."
The district board outlined a preliminary project list that could be pursued through the Measure G bonds during a Jan. 11 board meeting. One of the more costlier projects includes upgrading heating, ventilation and air condition (HVAC) systems, which was given a budget of $44.7 million. Total cost of all projects is estimated to be around $175.6 million.
The project list will continue to be updated.
With the first of many Measure G bonds sold, the district can now move forward with its pledge to renovate its buildings and expand classrooms at its two campuses. Along with the preliminary list, both college campuses also completed a Facilities Master Plans, which details some improvement projects and a couple new facilities. The plans were approved on May 3.
Twenty million dollars of the $110 million Measure G bonds that were sold are tax exempt and, by law, that money must be spent within three years, the district said. The other $90 million comes in the form of federal taxable bonds, which means that money can be spent over a longer period of time. According to Cheu, this gives the district more flexibility and the opportunity to invest in affordable housing projects for district students and employees.