The Foothill-De Anza Community College District reached a 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 infrastructure upgrades, repairs and renovations to existing buildings, as well as new construction.
“We appreciate voters’ support for creating a truly outstanding and environmentally sustainable learning environment for our students and community,” said Chancellor Judy C. 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, the tax rate for retiring Measure C bond debt is 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.
The lower tax rate is the result of a combination of factors, according to district Vice Chancellor of Business Services Kevin McElroy, including historically low interest rates, increases in property valuations in the district’s service area and the district’s 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. The sales resulted in a total debt service savings of $32.4 million for taxpayers. That amounts to a savings of $1.4 million per 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 lower interest rates. Combined with the 2016 bond refunding, refinancing 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 long-standing support of the district,” Miner said.
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 the highest possible ratings. Sheldon said the credit ratings reflect the district’s financial profile, including its management of financial resources and the area’s growing tax base.
Measure C funds have enabled the district to meet such needs as replacing leaky roofs; renovating classrooms, laboratories and offices with the addition of updated electrical, heating and ventilation systems; constructing modern science facilities; installing energy management systems to reduce operating costs; upgrading the computer network; and enhancing the security system.