JJC Board narrowly approves $70M bond sale
BY BOB OKON email@example.com August 13, 2013 10:01PM
Updated: September 15, 2013 6:36AM
The Joliet Junior College Board voted 4-3 on Tuesday to issue $70 million in bonds, but not without a debate over the need for new construction and the college’s ability to pay for it.
Most of the bonds, $45 million, will be used to erect a new multipurpose building on the main campus in Joliet and expand facilities at the Romeoville campus. The other $25 million will be used to restructure old bond debt in an attempt to keep down a fee that’s charged to students to help pay off the bonds.
But the board also heard Tuesday that rising interest rates could mean that the planned $4 increase in student fees won’t be enough.
Trustee Tina Markley, who voted against the bond issue, pointed to the costs of a building under construction in downtown Joliet and questioned the estimated $37 million price tag for the multipurpose building.
“How long will we continue to tap our students out for continuously building when we don’t have the money?” Markley said.
But students support the multipurpose center, said Keith Bryant, the board’s student trustee, who also voted for the bond sale, though his vote was only advisory.
“There is definitely a need for a new multipurpose center here,” he said. “What we have now is truly out of date.”
The new building would be used to bring graduation ceremonies, which are held at Lewis University in Romeoville, back to JJC. But it would be used mainly for physical education, athletics and as potential meeting space for conferences.
Trustee Jeff May called the college’s existing athletic facilities “substandard” and said it was the right time to embark on construction projects.
“Now is the time to build,” May said. “We’re building for the next few decades, the next century really.”
May was joined by board chairman Andrew Mihelich and trustees Robert Wunderlich and Susan Klem in voting for the bond issue. Voting no were Markley, Michael O’Connell and Barbara Adams.
O’Connell said he strongly supports building the multipurpose center but questioned the $45 million cost of the construction projects at the two campuses. He advocated bringing total construction costs down to $30 million, saying “I think we’d be on a lot safer ground.”
Trustees also dealt with a new twist to the financing when bond counsel Robert Lewis from PMA Financial Network advised them that the repayment plan could be thrown off by higher interest rates associated with anticipated changes in Federal Reserve policy and nervousness in the municipal bond market after the Detroit bankruptcy.
“We didn’t foresee the increase in interest rates. Nor did anyone else,” Lewis said.
Higher interest costs could mean that the college in 10 years or so may have to look at another $1 increase in the capital assessment fee charged to students to pay off the bonds. The board in July voted to increase that fee in the spring semester from the current $17 per credit hour to $21.
The college also is counting on an average annual growth in enrollment of 1 percent for most of the 25-year life of the bonds to provide added tuition revenue to help pay off the debt.
Also joining the debate Tuesday was Brad Baber, a member of a group called the Will County Liberty Club, which recently bought radio advertising to oppose JJC’s building plan. Baber called the multipurpose building “another unnecessary boondoggle” and said his group would publicize the names of the trustees who voted for it.
Baber was the only citizen, however, to speak to the board on Tuesday. And no one came to speak on the bond sale at a July 30 public hearing.