OCEANSIDE — The MiraCosta College board of trustees recently approved a $53 million lease revenue bond to help pay for campus modernization projects after funds from a voter-approved bond fell short of meeting the college’s goals.
In 2016, voters approved Measure MM, a $455 million general obligation bond that increased taxes for residents to help the college modernize aging facilities and upgrade instructional technology across the college’s campuses.
The project was intended to cover upgrades to the Veterans Center and career training facilities, provide modernized instructional technology, improve access for students with disabilities, repair or replace leaky roofs and other worn-out facilities, and update science centers and labs.
According to the college administration, the nearly half-billion dollar Measure MM bond has covered most of the proposed facilities under the project but still wasn’t enough to cover everything. A lease revenue bond is a tax-exempt loan repaid with revenue generated from the project, typically rent. These types of bonds are not funded by taxes and do not require voter approval.
Tim Flood, vice president for administrative services, said construction costs have gone up roughly 30% since Measure MM was approved. On top of that, labor and supply chain shortages have slowed down some construction efforts.
State construction code changes have also forced the college to complete additional, expensive work not previously budgeted. According to Flood, the state determined MiraCosta required a full, seismic update of the “Equity Village” project, which would demolish and reconstruct five buildings to combine the communications hub, social justice, equity and student centers.
“That had almost a $20 million impact on our budget,” Flood said. “It wasn’t part of it, but it was something we had to do.”
Flood noted the college has been good with prioritizing certain projects to be completed first over others.
As Measure MM funds are anticipated to run out following the completion of the equity village portion, the college had two crucial projects remaining: a $35 million science lab reconstruction and a $16 million installation of solar panels on the Oceanside campus.
The college wants to complete the solar panels sooner rather than later to qualify for the federal government’s Inflation Reduction Act, which will give back about 30% to 40% of construction costs if the project is completed within two years, Flood said.
By installing solar panels on campus, the college expects to generate approximately 82% of its overall power.
“We’ll see substantial savings,” Flood said. “Over time, we’ll make money off of that by deferring all the costs we would normally incur through SDGE.”
The $53 million lease revenue bond — plus more than $30 million saved in college operational costs — will cover the remaining science lab and solar panels projects, along with other directional and braille sign installations around campus. The loan will also cover some projects at the San Elijo Campus in Cardiff, including a travel path from Manchester Avenue to the center of campus and installing reclaimed water infrastructure for landscaping.
A lease revenue bond differs from a general obligation bond like Measure MM because it does not increase rates for taxpayers. Instead, the college takes out a loan and pays it back annually over a period of time, according to Flood.
“It’s a zero-sum to our taxpayers,” Flood said. “We’re basically saying we’ll run our operations tighter to pay it back.”
MiraCosta will pay back the lease revenue bond at $3 million per year over a 30-year period.
Although the college has experienced a shift to more online and hybrid classroom settings, Flood said there is still a need to have state-of-the-art spaces accessible to students and the community on campus, particularly for students in health, athletics, chemistry, biology and technology sciences as well as arts and media.
“Just because we’re online doesn’t mean we don’t have the need for the community here and spaces here,” said Trustee Frank Merchat during the board’s Sept. 14 approval of the lease revenue bond. “When you talk to students and community members, that is a critical element of what we’re providing.”
Some have also questioned the need for additional campus space due to the college’s current enrollment numbers, which have declined since pre-COVID-19 years.
In fall 2018, the college had 16,841 enrolled students, but that number gradually declined to 13,824 enrolled students by the fall of 2022. However, the college’s enrollment has started increasing again. This fall, the college bumped up to 14,214 enrolled students, according to Communications Director Kristen Huyck.