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
• Infrastructure
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
How Much Will Oakton’s
Master Plan Cost?
$ 25 Million ?
$ 50 Million ?
$ 75 Million ?
At this time we don’t know
What We Do Know
It is not too early to be
thinking about how Oakton
might fund its Master Plan
Funding Possibilities
• Bonds (non-referendum)
• Debt certificates
• Construction fee
• Performance contracting
• Alternative funding
• Net assets (reserve)
• ICCB Grant/State of Illinois
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
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
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
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)
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
Alternative Funding
• Capital Campaign by Education Foundation
• Creation of partnerships with businesses
• Stimulus Programs
– Energy efficiency back grants
– State energy program
• Other Grants
Net Assets (Reserve)
June 30, 2009
Unrestricted Reserve
$59,800,000
Restricted Reserve
$22,670,000
ICCB Grant
State 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
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