SANTA ROSA JUNIOR COLLEGE
BUDGET ADVISORY COMMITTEE
Friday, November 16, 2001
Oak Room, 10 a.m.
The meeting was called to order by Ron Root (Co-Chair).
Members present: Barbara Croteau (Co-Chair), Rich Abrahams, Micca Gray, Xuan Ho, Jamey Ransford, Ed Sikes, Sandi Tassano.
Members absent: Andrew Dolcini, Bob Flores, Ezbon Jen, Omar Medina, Joe Morello, Tatjana Omrcen, Bonnie Pearson, Deborah Sweitzer,
Staff to the Committee: E. Cichocki, R. Kyle.
Deferred until the next meeting.
Ron Root summarized where the District is to date in considering a bond proposal for the March 2002 ballot. Proposition 39 was implemented January 1, 2001, lowering the minimum percentage of voter approval to 55%. Four community colleges in the state were successful with bond elections on the November ballot.
In the summer Fairbank, Maslin, Maullin & Associates did a public opinion poll to determine the extent to which the district voters support the college, and specifically a bond program. There was an overwhelming sense of support indicated by the survey which, Ron pointed out, was done before September 11. It was the best response that the consultant has ever seen. Because it was so successful, the Board decided not to do a follow up survey to measure the impact of September 11.
The Board has begun formulating a process to pursue the question of whether to present a bond proposal to the voters. $100,000 was set aside in the budget for the pre-election period. Lew Edwards Group campaign consultants is doing the pre-election work. During the pre-campaign phase the scope and cost of the bond project will be ascertained along with the cost to the taxpayer, a very technical area. The second phase is the direct campaign. Campaign funding must come from PAC money. No college resources of money or time can be spent on the campaign. Employees of the district cannot solicit support for a bond proposal on district time. Guidelines will be provided by legal counsel as to what employees can do on their own time.
The bond counsel selected by the board is David Casnocha of the firm Stradling Yocca Carlson & Rauth. Proposition 39 includes an accountability requirement necessitating the development of a project list. There are strict IRS rules about how fast bond draws must be used. The reason for this concerns arbitrage, a term used when more money is earned on the bond draw held than is paid in bond interest. The general rule is that eighty-five percent of the dollars must be spent within three years to avoid tax penalties on the unspent money. The board selected Mark Epstein, California Financial Services, as financial advisor to help with decisions in selling the bonds, sizing the bond issue, selecting an underwriter, payout term for taxpayers, etc. The summer survey indicated that the terms and conditions of the proposal will not have a fundamental impact on how voters view the proposal. The role of the underwriter is to sell and market the bonds, and the board selected Solomon Smith Barney. The costs for all the consultants, with the exception of the Lew Edwards Group, are on a contingency fee basis. They are paid from the proceeds of bond sales if the proposal is approved. By terms of the agreement with Solomon Smith Barney, a selling group to market the bonds was formed to include all retailers within Sonoma County.
The Bond Projects List Discussion Draft dated 11/7/01 was reviewed. The list totals about $232 million worth of locally-funded projects. Speaking in his capacity as Chief Financial Officer for the college, Ron Root noted that without the bond program it is not likely that the Learning Resource Center will be built. Cost of the LRC is $38 million; $19 million of that may have to come from local revenue. The district is working on the assumption that projects will continue to be funded 50/50 state/local. The Bond Projects List is a summary of a spreadsheet that does include numbers. A summary of the list will be presented to the voters. Adaptations to the list will be made as changes occur, for example, in technology.
Ron Root read the latest version of the ballot proposal language which must be 75 words or less. The language is structured according to community support reflected in the summer survey. The dollar amount for the bonds depends upon variables including: assessed valuation in the district over time; market interest rates; and when draws are made to determine timing the bond sales. If the proposal passes, the district could begin selling bonds by the end of summer.
Ron asked the members to carefully review the project list for omissions, observations and/or inconsistencies and forward those to Curt Groninga (copy to Ron).
Eileen Cichocki distributed for Jeanne Johnson a Classified Staffing Age Chart which was omitted from Fact Book discussions at the last meeting.
Meeting adjourned: 11:35 a.m.
Next Regular Meeting: Tuesday, November 27, 2001, 2:30 p.m. - Senate Chambers
Posted by mlinford at November 16, 2001 12:00 PM