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Board of Trustees Meeting Funding Possibilities For Master Plan May 25 , 2010

Board of Trustees Meeting Funding Possibilities For Master Plan May 25 , 2010. Master Plan Steering Committee Objectives . New Science and Allied Health Labs Enrollment Center Classroom modernization Student studying/gathering space Wi-Fi and cell phone reception in all public areas

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Board of Trustees Meeting Funding Possibilities For Master Plan May 25 , 2010

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  1. Board of Trustees Meeting Funding Possibilities For Master Plan May 25 , 2010

  2. Master PlanSteering Committee Objectives • New Science and Allied Health Labs • Enrollment Center • Classroom modernization • Student studying/gathering space • Wi-Fi and cell phone reception in all public areas • Infrastructure

  3. Other Community Colleges’ Master Plans • Harper College $ 89 million in 2001 • $ 156 million in 2008 • College of DuPage $ 183 million in 2002 • Moraine Valley $ 89 million in 2006 • Elgin $ 178 million in 2009 • Joliet $ 220 million in 2008

  4. How Much Will Oakton’sMaster Plan Cost? $ 25 Million ? $ 50 Million ? $ 75 Million ? At this time we don’t know

  5. What We Do Know It is not too early to be thinking about how Oakton might fund its Master Plan

  6. Funding Possibilities • Bonds (non-referendum) • Debt certificates • Construction fee • Performance contracting • Alternative funding • Net assets (reserve) • ICCB Grant/State of Illinois

  7. Bonds • Debt Extension Base is $2,950,000 • Max College can spend in one year on debt service (principal & interest) • Grows at same rate as CPI

  8. Bonds • Assuming CPI grows 1.5% annually • College could borrow about $45 million • Pay it back over 20 years • Interest rate of 4% (May, 2010) • Total cost principal & interest about $73.5 million • Would increase property tax bill by 7% annually • Typical homeowner property tax bill increase from • $175 to $188 or $13 increase

  9. Debt Certificate • Similar to bonds • Can be used to pay for construction • Less restrictive than bonds; requires only Board action • May cost 10–25 basis points more than bonds • No tax levy to support debt service

  10. Construction Fee • Could add construction fee to help pay for Master Plan • $5 per credit hour equals $1 million annual revenue stream • Could issue Alternate Revenue Bonds with the revenue stream • College could borrow about $11 million • Pay it back over 20 years; debt service cost of $19 million • Interest rate of 4% (May, 2010)

  11. Performance Contracting • Make energy saving improvements • Energy savings pay for improvements • Down side • More expensive than bonds • Interest rate of 6 – 9 % • Usual 10 year term

  12. Alternative Funding • Capital Campaign by Education Foundation • Creation of partnerships with businesses • Stimulus Programs • Energy efficiency back grants • State energy program • Other Grants

  13. Net Assets (Reserve) June 30, 2009 Unrestricted Reserve $59,800,000 Restricted Reserve $22,670,000

  14. ICCB GrantState of Illinois • Currently Oakton is number 21 on the ICCB Capital Projects list • If funded would represent about $40 million to College from the State

  15. Our Timing is Good… • Interest rates are near all-time lows • Construction costs are down • Number of realistic funding options • Ability to mix and match funding options • Opportunity to involve many stakeholder groups

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