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.
Capa is the mild-mannered, culturally-confused English major of The Prospector. As an aspiring novelist he thrives to write simply for the sake of writing. Other than writing he spends most of his free time on music and video games, sometimes even combining the two. Also likes to think he’s up in the-know with technology. No, not really. Reach him at prospector.clo@gmail.com for comments and/or suggestions.
I’ve been told over and over that Houston has a rep for coming in and saving schools that others feel are “a sinking ship.” It’s interesting that he would trust judgments that were made before his time, by people that have since abandoned Yuba College, without checking the facts first.