STATE BOARD OF EDUCATION – TOPIC SUMMARY
Topic: 2011 Spring Bond Sale for Capital Projects
Date: January 21, 2011
Staff/Office: Camille Preus, CCWD; Pam Teschner, CCWD
Action Requested:
Information only
Policy Adoption
Policy Adoption/Consent Calendar
ISSUE BEFORE THE BOARD: Approval of the resolution to sell Article XI-G Bonds for capital projects at
nine community colleges.
BACKGROUND: Prior and current Legislative Sessions have authorized the State Board of Education to
issue general obligation bonds (See Table A), with the proceeds to be used to finance capital construction and
facilities repair and renovation projects at Community Colleges. These bonds were authorized under Article XIG of the Oregon Constitution.
Article XI-G bonds are issued to acquire, construct, improve, repair, equip and furnish, buildings, structures,
land, and other projects or parts thereof, and to purchase or improve sites thereof. The projects are designated
by the Legislative Assembly for community colleges authorized by law to receive state aid. The amount of the
bonds issued is matched by an amount that is at least equal to the amount of the indebtedness. The match is
provided by the community colleges. The Legislature established a mechanism whereby the match may be
generated through gifts and/or federal and local governmental funds.
The sale is currently scheduled for early May 2011. Three colleges have informed us that they will not have
matching funds in time to participate in this sale: Clackamas, Columbia Gorge and Umpqua. When the docket
is brought to the Board for final adoption and resolution, the amount of bonds requested will be reduced by the
amount of unmatched projects.
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RESOLUTION FOR THE SALE OF ARTICLE XI-G BONDS
2011 Spring Bond Sale for Capital Projects
Project Summary – See Table B
A Total of $63,233,000 Recommended for Sale for Article XI-G Bonds
Summary
The staff will recommend the Board approve a request to the State Treasurer to issue $63,233,000 of
bonds under authority of Article XI-G of the Oregon Constitution. This sale is currently scheduled to
be held in May 2011. The total sale requested is for $63,233,000. The college’s projects included in
this sale have received both Board and Legislative approval.
Staff Report to the Board
Background. Prior and current Legislative Sessions have authorized the State Board of Education to
issue general obligation bonds, with the proceeds to be used to finance capital construction and
facilities repair and renovation projects at Community Colleges. These bonds were authorized under
Article XI-G of the Oregon Constitution.
Article XI-G bonds are issued to acquire, construct, improve, repair, equip and furnish, buildings,
structures, land, and other projects or parts thereof, and to purchase or improve sites thereof. The
projects are designated by the Legislative Assembly for community colleges authorized by law to
receive state aid. The amount of the bonds issued is matched by an amount that is at least equal to
the amount of the indebtedness. The match is provided by the community colleges. The Legislature
established a mechanism whereby the match may be generated through gifts and/or federal and local
governmental funds. The Department last issued Article XI-G bonds in April 2009.
This sale will include projects authorized by the 2007 and 2009 legislative sessions:
2007-2009 Community College Bill Authorization. As approved, Senate Bill 5516, Section 3,
(Chapter 761 Oregon Laws 2007) authorizes a maximum issuance of $40,040,500 of Article
XI-G bonds in 2007-2009.
2009 Legislative Session. As approved, Senate Bill 5506, Section 7, (Chapter 904 Oregon
Laws 2009) authorizes a maximum issuance of $57,455,000 of Article XI-G bonds in 2009-11.
Request for Board Authorization to Issue. The Department is now seeking authorization from the
Board to issue a total of $63,233,000 in Article XI-G bonds as part of a sale currently planned by the
State Treasurer for May 2011.
Article XI-G bond issuance costs are estimated at 2% ($1,264,660) and will be deducted from the
bond sale proceeds for this project.
Prior to sale, the Department’s bond counsel may designate a portion of the sale as taxable, due to
space utilization by private entities in the projects to be financed under this sale.
Three tables are provided after the resolution, to display information on the projects and information
on debt services issues:
 Table A, included in the resolution, identifies the Article XI-G projects recommended for the
May 2011 Bond Sale.
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 Table B identifies the various legislative sessions and the approved Article XI-G bond amounts
by college.
 Table C projects annual Article XI-G bonded debt outstanding and estimated, assuming
approval of the proposed May 2011 Bond Sale.
Resolution for the Sale of Bonds for Capital Projects
The resolution that will be before the Board authorizes staff to pursue the sale of bonds for all projects
currently identified by the campuses as needing bond financing consistent with the overall bond
limitation imposed by the Legislature for the period 2009-11 biennium.
Staff Recommendation to the Board
Staff will recommend that the Board adopt, at the March 2011 meeting, the following resolution:

finding that the projects for which Article XI-G bonds are proposed to meet the requirements of
Senate Bill 5516, Section 3; and Senate Bill 5506, Section 7, and

authorizing the sale of Article XI-G bonds.
(Resolution on following page)
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RESOLUTION FOR THE SALE OF BONDS FOR CAPITAL PROJECTS
WHEREAS, ORS 286.031 states, in part, that the State Treasurer shall issue all general obligation bonds of
this state after consultation with the state agency responsible for administering the bonds proceeds; and
WHEREAS, ORS 286.033 states, in part, that the state agency shall authorize issuance of bonds subject to
ORS 286.031 by resolution; and
WHEREAS, ORS Chapters 341, 288, and 286 provide further direction as to how bonds are sold and proceeds
administered; and
WHEREAS, Chapter 761, Oregon Laws 2007, lists those projects that may be financed pursuant to Article XIG of the Oregon Constitution; and
WHEREAS, Chapter 904, Oregon Laws 2009, lists those projects that may be financed pursuant to Article XIG of the Oregon Constitution; and
WHEREAS, it is appropriate for this Board to authorize the State Treasurer to issue bonds for projects
authorized by previous Legislation and pending bills, once adopted by the Legislature and signed into law by
the Governor, and in amounts not greater than authorized by the bond bill and for other projects specified as
may be provided by law as otherwise required by law for the 2007-2009 and 2009-11 biennia without requiring
further action of this Board;
NOW, THEREFORE, be it resolved by the State Board of Education of the State of Oregon as follows:
Section 1. Article XI-G Projects. Pursuant to Article XI-G of the Oregon Constitution, the Board hereby finds
that the projects listed in the attached Table A appear to the Board to be projects in which each community
college has paid to the Department an equal matching amount from their own Other Revenue sources as
required by the various sections of the Oregon Laws are authorized to be sold under Article XI-G to provide
funds to pay these projects and costs of issuance of these bonds.
In accordance with guidance provided to the Department from the State Treasurer’s office, approximately 2%
issuance cost for Article XI-G bonds will be deducted from the bond proceeds to cover underwriting and other
costs associated with the sale. This will reduce the amount of funds available for actual project costs.
Section 2. Terms, Sale and Issuance. The bonds authorized by this resolution (the "Bonds"), shall be issued in
such series and principal amounts as the State Treasurer, after consultation with the Commissioner of the
Department of Community Colleges and Workforce Development or the Commissioner’s designee (the
“Designee”), shall determine are required to fund the projects described in Section 1 of this resolution. The
Bonds shall mature, bear interest and otherwise be structured, sold and issued as the State Treasurer
determines after consultation with the Commissioner. The maximum net effective interest rate for the Bonds
shall not exceed 10 percent per annum.
Section 3. Maintenance of Tax-Exempt Status. The Commissioner, or the Designee are hereby authorized to
covenant, on behalf of the Board, to comply with the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), that are required for interest on tax-exempt Bonds to be excluded from gross income
for federal income taxation purposes.
Section 4. Other Action. The State Treasurer, the Commissioner, or Designee, is hereby authorized, on behalf
of the Board, to take any action that may be required to issue, sell, and deliver the Bonds in accordance with
this resolution.
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Table A
May 2011 Article XI-G Bond Sale
Community College
SB 5516 (2007):
Central Oregon
Description
XI-G Bonds
Science and Allied Health Building
Classroom and laboratory space for healthcare workforce and other
educational programs.
Match received.
$5,778,000
Technology Education Center
Flight instruction, aviation maintenance, automotive, and information
technology programs.
Match received.
$5,700,000
Chemeketa
McMinnville Campus
Healthcare programs and other academic programs.
Match received.
$6,255,000
Clackamas
Harmony Campus Phase II
Allied health care center, workforce, and other educational programs.
Match not available until after local bond levy May 2011.
$8,000,000
Columbia Gorge
Workforce Building
Renewable energy and other workforce development programs.
Match not available – November 2010 levy failed.
$8,000,000
Lane
New downtown Eugene campus building.
Match received.
$8,000,000
Oregon Coast
Marine Science Building
New facility on the Central County Campus to support the aquarium science
and other marine related programs.
Match received.
$2,000,000
Portland
Cascade Campus Education Center in Portland
Match received.
$8,000,000
Treasure Valley
Ontario University/Science Center
Science, agriculture, technology, and allied health programs.
Raising match through donations, COPs or revenue bonds.
$3,000,000
Umpqua
Occupational Training Center
New classroom and laboratory facility in Roseburg for healthcare, public
safety, and information technology programs.
Match not available – local bond levy later in 2011.
$8,500,000
SB 5506 (2009):
Central Oregon
SUBTOTAL
GRAND TOTAL
$57,455,000
$63,233,000
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Table B
Community College Capital Construction
May 2011 Article XI-G Bond Sale
College
2007 Session
(SB 5516)
Central Oregon
Central Oregon
Chemeketa
Clackamas
Columbia Gorge
Lane
Oregon Coast
Portland
Treasure Valley
Umpqua
TOTAL SALE
2009 Session
(SB 5506)
5,778,000
5,700,000
6,255,000
8,000,000
8,000,000
8,000,000
2,000,000
8,000,000
3,000,000
8,500,000
$
5,778,000
$
57,455,000
Total
5,778,000
5,700,000
6,255,000
8,000,000
8,000,000
8,000,000
2,000,000
8,000,000
3,000,000
8,500,000
$ 63,233,000
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Table C
CCWD DEBT SERVICE
IX-G 2009-11 LAB Debt Service
Bond Sale
XI-G Bonds
March 2007 Bond Sale 1
$25,900,000
October 2008 Bond Sale 2
Principal
$915,000
Interest
$2,185,534
IX-G 2011-13 LAB Debt Service
Total
Principal
$3,100,534
$995,000
Interest
$2,110,258
Total
$3,105,258
$4,900,000
$90,000
$605,941
$695,941
$340,000
$517,830
$857,830
$55,666,250
$3,360,000
$3,582,416
$6,942,416
$2,975,000
$3,961,703
$6,936,703
Central Oregon (reauthorized from 2007)
$5,778,000
$0
$0
$0
$150,000
$692,100
$842,100
Central Oregon
$5,700,000
$0
$0
$0
$145,000
$682,800
$827,800
Chemeketa
$6,255,000
$0
$0
$0
$165,000
$748,800
$913,800
Clackamas
$8,000,000
$0
$0
$0
$205,000
$958,200
$1,163,200
Columbia Gorge
$8,000,000
$0
$0
$0
$205,000
$958,200
$1,163,200
Lane
$8,000,000
$0
$0
$0
$205,000
$958,200
$1,163,200
Oregon Coast
$2,000,000
$0
$0
$0
$50,000
$239,700
$289,700
Portland
$8,000,000
$0
$0
$0
$205,000
$958,200
$1,163,200
Treasure Valley
$3,000,000
$0
$0
$0
$80,000
$358,800
$438,800
Umpqua
$8,500,000
$0
$0
$0
$225,000
$1,017,600
$1,242,600
$0
$0
$1,635,000
$7,572,600
$9,207,600
April 2009 Bond Sale
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April 2011 Bond Sale 4
SUBTOTAL
XI-G GRAND TOTAL
$63,233,000
$0
$149,699,250
$4,365,000
$6,373,891 $10,738,891
$5,945,000 $14,162,391 $20,107,391
1 Debt service based on actual rate of 4.4%
2 Debt service based on actual rate of 5.6%
3 Debt Service based on actual rate of 3.9%
4 Debt Service based on estimate of 6.0%.
Lottery Bonds
April 2009 Sale (Go Oregon!)
April 2010 Sale
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May 2011 Sale 5
Lottery 2009-11 LAB Debt Service
Lottery 2011-13 LAB Debt Service
Principal
Principal
Interest
Total
$43,862,850
$3,530,000
$4,381,324
$7,911,324
$10,000,000
$327,866
$391,426
$719,293
$1,650,000
Interest
$4,249,228
$0 $ 873,133
Total
$5,899,228
$ 873,133
$3,700,000
$0
$0
$0
$235,000
$462,271
$697,271
LOTTERY GRAND TOTAL
$57,562,850
$3,857,866
$4,772,750
$8,630,617
$1,885,000
$5,584,632
$7,469,635
XI-G and LOTTERY GRAND TOTAL
$207,262,100
$8,222,866 $11,146,641 $19,369,508
$7,830,000 $19,747,023 $27,577,027
5 Provided by DAS.
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