1. Board of Trustees Meeting Funding Possibilities Funding PossibilitiesFor Master Plan May 25, 2010

2. Master Plan Steering Committee Objectives New Science and Allied Health LabsNew Science and Allied Health Labs Enrollment CenterEnrollment Center Classroom modernizationClassroom modernization Student studying/gathering spaceStudent studying/gathering space Wi-Fi and cell phone reception in all public areasWi-Fi and cell phone reception in all public areas InfrastructureInfrastructure

3. Other Community Colleges’ Master Plans Harper College$ 89 million in 2001Harper College$ 89 million in 2001 $ 156 million in 2008 College of DuPage$ 183 million in 2002College of DuPage$ 183 million in 2002 Moraine Valley$ 89 million in 2006Moraine Valley$ 89 million in 2006 Elgin$ 178 million in 2009Elgin$ 178 million in 2009 Joliet$ 220 million in 2008Joliet$ 220 million in 2008

4. How Much Will Oakton’s Master Plan Cost? $ 25 Million ? $ 50 Million ? $ 75 Million ? At this time we don’t know

5. What We Do Know It is not too early to be thinking about how Oakton might fund its Master Plan

6. Funding Possibilities Bonds (non-referendum)Bonds (non-referendum) Debt certificatesDebt certificates Construction feeConstruction fee Performance contractingPerformance contracting Alternative fundingAlternative funding Net assets (reserve)Net assets (reserve) ICCB Grant/State of IllinoisICCB Grant/State of Illinois

8. Bonds Debt Extension Base is $2,950,000 Max College can spend in one year on debt service (principal & interest)Max College can spend in one year on debt service (principal & interest) Grows at same rate as CPIGrows at same rate as CPI

9. Bonds Assuming CPI grows 1.5% annually College could borrow about $45 millionCollege could borrow about $45 million Pay it back over 20 yearsPay it back over 20 years Interest rate of 4% (May, 2010)Interest rate of 4% (May, 2010) Total cost principal & interest about $73.5 millionTotal cost principal & interest about $73.5 million Would increase property tax bill by 7% annuallyWould increase property tax bill by 7% annually Typical homeowner property tax bill increase fromTypical homeowner property tax bill increase from $175 to $188 or $13 increase $175 to $188 or $13 increase

10. Debt Certificate Similar to bondsSimilar to bonds –Can be used to pay for construction Less restrictive than bonds; requires only Board actionLess restrictive than bonds; requires only Board action May cost 10–25 basis points more than bondsMay cost 10–25 basis points more than bonds –No tax levy to support debt service

11. Construction Fee Could add construction fee to help pay for Master PlanCould add construction fee to help pay for Master Plan $5 per credit hour equals $1 million annual revenue stream$5 per credit hour equals $1 million annual revenue stream Could issue Alternate Revenue Bonds with the revenue streamCould issue Alternate Revenue Bonds with the revenue stream College could borrow about $11 millionCollege could borrow about $11 million Pay it back over 20 years; debt service cost of $19 millionPay it back over 20 years; debt service cost of $19 million Interest rate of 4% (May, 2010)Interest rate of 4% (May, 2010)

12. Performance Contracting Make energy saving improvementsMake energy saving improvements Energy savings pay for improvementsEnergy savings pay for improvements Down sideDown side –More expensive than bonds –Interest rate of 6 – 9 % –Usual 10 year term

13. Alternative Funding Capital Campaign by Education FoundationCapital Campaign by Education Foundation Creation of partnerships with businessesCreation of partnerships with businesses Stimulus ProgramsStimulus Programs –Energy efficiency back grants –State energy program Other GrantsOther Grants

14. Net Assets (Reserve) Unrestricted Reserve$59,800,000 Restricted Reserve$22,670,000 June 30, 2009

15. ICCB Grant State of Illinois Currently Oakton is number 21 on the ICCB Capital Projects listCurrently Oakton is number 21 on the ICCB Capital Projects list If funded would represent about $40 million to College from the StateIf funded would represent about $40 million to College from the State

16. Our Timing is Good… Interest rates are near all-time lowsInterest rates are near all-time lows Construction costs are downConstruction costs are down Number of realistic funding optionsNumber of realistic funding options Ability to mix and match funding optionsAbility to mix and match funding options Opportunity to involve many stakeholder groupsOpportunity to involve many stakeholder groups