by JENNIFER BIUNDO
Delayed by a pending lawsuit filed by Kyle dentist Ray Wolbrecht, Austin Community College is missing out on more than $20 million in interest reduction from a recently-expired federal program and may have to scale back the scope of its Hays County campus, school officials said this week.
ACC had planned to finance construction of the Hays campus with the help of Build America Bonds, which provide federally subsidized low-interest loans to governmental agencies. But the federal program expired at the end of 2010, just three weeks after Wolbrecht filed suit against ACC, arguing that the college failed to adequately inform voters of the possible tax impact they faced by annexing into the ACC district.
“The suit prevented ACC from availing itself of the Build America Bond program for the Hays Campus,” said ACC attorney Cobby Caputo. “Our financial advisor estimates it will cost ACC’s taxpayers an additional $21 million over the 25 year term of the bonds.”
Voters in the Hays and Elgin school districts approved a proposal in November to annex into the ACC taxing district, while San Marcos, Bastrop and McDade ISDs shot down a similar ballot option. The annexation elections proved to be controversial, with supporters passionately outlining the benefits that a college institution could bring to their region, and opponents arguing that the short-term benefits of in-district tuition rates didn’t stack up against a lifetime of higher property taxes.
Wolbrecht, who had campaigned against the annexation, filed suit against ACC on Dec. 10, saying that the college failed to tell voters how high a property tax bill they could eventually be on the hook for. While residents in the ACC district now pay 9.46 cents per $100 of property valuation in the June 2 service plan, the lawsuit argues that ACC did not publish the maximum tax rate of $1.00 per $100 of property valuation that they are legally allowed to assess. The suit seeks to overturn the results of the annexation election. He is represented by San Marcos attorneys Mark Cusack and Billy McNabb.
Caputo said ACC finalized a bond issuance in mid-December for the Elgin Campus, meeting the deadline to be financed by Build America Bonds. However, the lawsuit caused ACC to miss the deadline for the Kyle campus, he said.
“There was insufficient time to try and resolve the lawsuit, have bonds approved by the Attorney General, and close on the bonds before the Build America Bond program expired on December 31, 2010,” Caputo said.
ACC had originally proposed a $45.8 million, 72,000 square foot campus in Kyle’s Plum Creek development, with a target opening date of August, 2013. Following the successful Hays annexation election – and the defeat in San Marcos CISD – ACC announced plans last month to expand the Kyle campus to a $55.8 million, 100,000 square foot facility.
However, the higher borrowing costs could result in a smaller campus for Hays County.
“If interest rates continue to increase the total cost to ACC’s taxpayers of not being able to take advantage of the Build America Bond program for the Hays Campus will likely increase,” Caputo said. “In order to compensate for this large increase in cost, it may be necessary to scale back the size of the first phase of the building program for the Hays Campus, by about $7 million dollars.”
ACC plans to close on the Plum Creek property by Jan. 26, Caputo said.Email | Print