Oakton Community College Operating Funds (Education and Building)

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

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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

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How Much Will OaktonsMaster Plan Cost?
25 Million ? 50 Million ? 75 Million ? At
this time we dont know
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What We Do Know
It is not too early to be thinking about how
Oakton might fund its Master Plan
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Funding Possibilities

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

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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

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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

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Debt Certificate

• Similar to bonds
• Can be used to pay for construction
• Less restrictive than bonds requires only Board
  action
• May cost 1025 basis points more than bonds
• No tax levy to support debt service

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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)

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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

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Alternative Funding

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

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

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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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