2012 has brought a lot new changes for the Yuba Community College District. A new campus has been built in Sutter County. The Linda campus has received a new building for the Health and Public Safety programs, as well as a new theater, a new gymnasium and athletic field, and a library remodeling is in-progress. In Colusa County, an outreach facility was just made a reality. Additional upgrades to the Clear Lake campus have also been made to include more student services. But at what cost?
To shine a light on recent events, The Appeal-Democrat has reported that the bond money coming from Measure J, a grand total of $35 million, may leave us with injuring results.
For those who aren’t aware of how a bond works, it’s not so different from buying a house using a bank loan. It is something that has to be paid back. And with a loan comes interest rates.
YCCD has ‘borrowed’ money from Measure J, and now has to pay all of that back along with a hefty interest rate. Of that $35 million, $4.6 million comes from a different obligation bond known as a Capital Appreciation Bond (CAB). What that means is that instead of paying back the loaned money right away, a CAB puts a delay on repayment. However, as nice as that may sound, the accumulation of unpaid interest will skyrocket over time and an unusually high amount called a balloon payment will be due. By the year 2038, to be exact.
In the time between now and then, that $4.6 million will become $58.8 million, putting the interest rate at $54.2 million. That’s a scary amount which places the district, the staff members, and all the students at a huge risk. Chancellor Douglas Houston even confesses that he did not know about all the details until just a few weeks ago and says, “I freely admit it was my responsibility to know them.”
As the Governing Board attempt to explore possible solutions, one thing is certain; the district taxpayers will be the ones who will have to pay that money back. And that means us.