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$95 million Measure J bond slashed to $35 million
New buildings and facility improvements promised to residents five years ago for Yuba Community College District might be on hold.
The economic downturn's impact on the housing and municipal bond market have created problems for the district in securing the Measure J bonds and money for improvements. The Series C bond trustees recently approved for issuance and sale is going out for $35 million, not the $95 million originally anticipated, so college trustees met Wednesday to discuss priorities in moving forward.
"This is going to be a critical issue in the life of the district. We really have to make sure we make wise decisions and choices at this junction so students get the maximum benefit," said Trustee Gary Sandy.
Measure J was passed by voters in the eight counties served by the district in November 2006 to repair, renovate and add facilities for community college services. The district had 20 years to issue the bonds at legal rates and the bond construction program is financially at its halfway mark, with $95 million issued in the A and B series in 2007.
Still to be completed are building renovations and service centralization at the Linda campus, the Sutter County Center in Yuba City, multipurpose and performing arts buildings in Woodland and upgrades to the Clear Lake campus.
Opinions differed widely on whether projects at the Woodland, Clear Lake, Linda or future Sutter County campuses were most needed, deserving or merited. Of six scenarios presented Wednesday, only one included the Sutter County Center, at $18 million.
Sutter County students have crossed the river for years to get to the Linda campus and will continue even once the Yuba City facility is finished, said Trustee David Wheeler. The Linda campus is in dire need of renovation.
Trustee Jim Kennedy agreed, saying the Linda campus is his first priority, followed by Clear Lake.
"They are horribly neglected, it's a travesty," Kennedy said. "It's nice to say one can learn anywhere, but roofs need to be replaced, wiring needs to be redone. They are pathetic."
But some trustees argued ground has been broken on the Sutter County Center and it should be completed. Sutter County voters also led the passage of the bond measure.
"I think Sutter is going to be the future for us," said board Chairman Xavier Tafoya. "I really would like to see a campus site being put there."
A challenge with the Sutter County Center and new construction in Woodland is the full-time equivalent student growth the facilities would create have not been funded by the state, so operational costs could be a concern.
"If the state is not going to give me money to run it, why build it," said board Vice Chairman Brent Hastey.
Yuba College has been around the longest and needs to be repaired, he said, and the Clear Lake campus has been a portable building its entire life, needing a permanent structure and already having the students and funding to fill it.
The board will discuss the priorities again next Wednesday.
"The district is moving forward with its promises to taxpayers," said district spokesman Adrian Lopez. "Ultimately the goal is to see this program through fruition. We will get the voters the facilities they were promised."
In addition to the bond amount decrease, property owners will now pay the maximum $25 instead of $16 per $100,000 in property value to pay for the bonds.
But because of the decline in the housing market, property owners likely will not pay more than they would have at the time of the measure's passing.
The Series C bond was initially anticipated to sell for $95 million, so to sell it for $35 million is a "severe loss," Kennedy said before the meeting, noting he was not a trustee when the measure was passed.
When Measure J passed, it was near the peak of the housing market, Kennedy said. But because of its steady decline and a shrinking appetite for municipal bonds, it's unlikely the district could have sold the bond for the originally planned amount.
The economic value of existing homes will have to increase and new homes will have to be built in order for additional bond money to be possible, which could be two years, five years or further into the future.
Music instructor Robert Mathews addressed the board to ask about the validity of circulating rumors — namely that some projects will be axed because of a lack of funds.
Chancellor Nikki Harrington assured him this was not the case. All the projects will be built, she said, although costs may change.
Projects completed or nearing completion under the first bond series include the new Allied Health and Safety building, new athletic fields and renovations to the physical education complex at Linda, the Colusa County Outreach Facility in Williams and renovation of the 700 building in Woodland.