Funds intended to upgrade, expand campus facilities
Officials from the Santa Clarita Community College District, which encompasses College of the Canyons, announced that its third bond issuance under Measure E, sold in late October, yielded $70 million for the purpose of building out the Canyon Country campus and upgrading the Valencia campus.
“Thanks to the support of the community through Measure E, College of the Canyons continues to be well-positioned to extend its programs and services for our students and our local workforce,” said Chancellor Dianne Van Hook in a prepared statement.
“The planned enhancements 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 at both campuses. COC issued its first and second series of bonds and authorized an aggregate 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 with how this would affect property owners and criticized the process in which the bonds were sold. Other community members and students testified to the board in favor of the issuance, saying these funds can improve COC facilities, benefitting students and the community.
Petzold said he was worried if the district issued the remaining $95 million that decision would negatively impact property owners at a time when inflation is high.
“They said you wouldn’t have to pay more than $15 per $100,000 assessed value in 2016, right when the bond measure was approved,” Petzold said. “Legally, they can break it and they could go up as high as $25 per $100,000 assessed value.”
As part of the bond measure description in 2016, district officials indicated they would do their best to keep a property tax rate of $15 per $100,000 in assessed valued, which would be required to repay the bonds.
According to Sharlene Coleal, COC’s assistant superintendent and vice president of business services, for the average home of about $800,000, that would be about $120 per year in property tax.
Petzold said he could not understand how the district would be able to keep that promise to taxpayers if they issued the full $95 million without placing a burden on taxpayers.
“They’re saying it will stay under $15 per $100,000 assessed value because what they’re doing is borrowing the interest that’s going to be due in the ’23-24 tax year,” Petzold said. “They’re praying that the increase in projected assessed valued will go up enough.”
David Casnocha, attorney and COC’s bond counsel, said the plan was to finish off the bond program this year and issue the remaining $95 million. Early in the year, the district’s board of trustee adopted and authorized up to $95 million in bonds and for that process to unfold.
However, the board ultimately opted to issue $70 million instead of the full $95 million after receiving further information and data related to an increase in interest rates, the projected tax rate necessary to repay the bonds, and formulating a spending schedule.
“In that context, the district underscored their commitment to the taxpayers when the bond measure was first passed that they expected the tax rate of $15 per $100,000 of assessed value,” Casnocha said. “The board of trustees and the staff very much wanted to stay with a tax that was on or very close to that number.”
“And as it turned out, because of rising interest rates, we couldn’t conservatively project a $15 tax rate if we sold all $95 million with the bonds. So, we downsized the bond issue toward the very end from $95 million to $70 million.”
The district will look to issue the last $25 million in bonds in the future, he added.
Casnocha also noted the repayment for series A and series B of Measure E are still outstanding. The combined tax to support all of the district’s bonds, series A, series B and series C, is at or near $15 per 100,000 of assessed value, he said.
The first and second issuances of Measure E proceeds funded construction of the Takeda Science Center. The approximately 55,000-square-foot building is primarily devoted to physical and biological sciences, housing eight labs and lecture classrooms.
Measure E also funded construction of the Student Services/Learning Resources Center, which is nearing completion at the Canyon Country campus. The four-story building sits adjacent to the Takeda Science Center and will provide office and library space at the Canyon Country campus, according to COC officials.
In addition, the district also built a three-story parking structure at the Valencia campus, which added 1,659 parking spaces.
This third issuance will go toward the renovation of several existing buildings at the Valencia campus. The funds will also support construction of a new 25,000-square-foot classroom and lab building that will replace two sections of modular buildings at the Canyon Country campus.
Eric Harnish, vice president of public information, advocacy and external relations for COC, said the district would be looking to use some of those funds to make improvements and stay in compliance with the Americans with Disabilities Act.
Coleal noted district staff received communications from students and other stakeholders that they were glad to see this third issuance. Students in particular want to be in these new or updated facilities, she added.
Harnish said COC’s enrollment has declined, but “it is not something that’s unique to community colleges as it’s something that all levels of higher education are experiencing.” COC’s current enrollment from the 2021-22 school year is around 32,000 students, he added.
“Students are showing a preference for coming back to in-person classes, but there is still demand for online classes as well due to the flexibility that affords,” Harnish said.
According to Harnish, local Santa Clarita voters approved three measures for the college: Measure C in 2001, Measure M in 2006 and then Measure E in 2016.
“It’s important to look back that far because it really shows the college’s commitment to protecting the taxpayer,” Harnish said. “We’ve refinanced bonds four times and that has yielded a savings of nearly $50 million to local taxpayers.”
Coleal affirmed the entire bond process from beginning to end is “highly scrutinized.”
The district works with several agencies such as the IRS, rating agencies, attorneys, financial advisors and the Los Angeles County Treasurer and Tax Collector to review all transactions, she added.
“There’s a significant number of checks and balances that are built in to the bond sale process — both during the sale and then afterwards as you spend the money,” Harnish said. “The district’s taxpayers can be confident in that process.”