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Real Property Owners Pay on E for COC

| Opinion | November 30, 2017

by Steve Petzold

In June of 2016, Santa Clarita community college district voters approved a Proposition 39 bond measure for College of the Canyons popularly known as Measure E, which authorized the district to borrow up to $230 million for capital improvement and repair projects. The debt incurred for Measure E is layered on top of the debt incurred for Measure C (2001) and Measure M (2006).

Proposition 39 was passed by the voters in 2000, and gutted an important taxpayer protection provision of Proposition 13 by lowering the required super majority of two-thirds to 55 percent for bond measure approval.

In April of 2017 the college issued $50 million of bonds under their Measure E authority, and the property tax bill for 2017 is our first chance to look at what the E bond will cost real property owners across the Santa Clarita Valley.

The payment rate per 100,000 of assessed valuation increased 56 percent from 27.579 (2016) to 43.045 (2017). On my personal residence (approximate assessed valuation $400,000), this meant an increase of $63 year-to-year ($107 to $170). While the nominal amount may appear small on one home, it is a very large amount across the Santa Clarita Valley. As the community college authorizes additional debt, and interest rates continue to increase, the payment amount will escalate in future years.

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The numbers for the aggregate payment rate of .043045 (all bond issues combined) can be confirmed by property owners by analyzing their annual property tax bills. You simply look under “Voted Indebtedness – Community College.” The tax collector payment rate is multiplied by the net taxable value also found on your bill.

Interestingly, the payment rate advertised by the community college district during the 2016 election cycle was $15 per $100,000 of assessed value. The actual rate attributed to Measure E funding was 15.30 according to the Los Angeles County auditor controller. It is common in bond propositions to have the payment rate estimate to be low. But wait … there is more.

Measure M (2006) was sold to the voters as having a payment rate of $9.73 per $100,000 of assessed valuation. According to information provided by the Los Angeles County auditor controller, the payment rate attributable to Measure M debt (which includes some Measure C debt that was refinanced) is $18.867 — yes, almost double the estimated rate disclosed to the voters when the measure was placed on the ballot.

At the end of June, 2017 the total estimated bond debt for the Santa Clarita Community College District was $263,000,000. Based upon a student population of 30,000, this amounts to $8,766 per student. Based upon a state standard FTES (Full Time Equivalent Students), bond debt exceeds $20,000 per student, assuming the college’s estimate of 13,000 FTES.

Shockingly, a large percentage of COC students (best estimate 45 percent) live outside of the Santa Clarita Community College District. We are building and maintaining facilities for students who do not contribute to the construction, repair, renovation, and maintenance of physical plant.

While community college districts advertise free and low tuition, it is important to understand that it is the taxpayers and district real property owners who pay the bills. The real cost is extremely high, and going higher.

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