San Marcos Mercury | Local News from San Marcos and Hays County, Texas

January 6th, 2011
Lawsuit could cost ACC millions in federal funds


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.

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8 thoughts on “Lawsuit could cost ACC millions in federal funds

  1. Another frivolous lawsuit…someone should sue him for costing taxpayers the additional $21 million.

  2. Thank you, thank you, thank you, way to go! Maybe next time they will be more honest with the voting public. Thank goodness “we the people” voted this down the last election.

  3. Why did the lawsuit cause ACC to miss the filing deadline? Can ACC still not submitt for Bond approval regardless? Perhaps ACC was unable to file in time because after the voters in SMISD (thankfully) rejected the annexation, ACC scrambled to change their plans by expanding the Kyle campus.
    Sounds like this might be ACC using this lawsuit as a scapegoat to hide their short comings in getting the bond app filed.

  4. Talk about arrogance- there is no guarantee that the college will WIN the lawsuit and further force themselves on outside communities. Did you catch the part about the “ACC taxpayers” will have to foot these “extra costs”. This is not a frivolous lawsuit, it is a necessary step to stop a forced acceptance of an additional college in an area that has an excellent 30,000 student university. If ACC had been more forthcoming with voters, there might not be a college to complain about. Good job Dr. and lawyers- hang in there.

  5. I’m amazed that this article has not generated dozens of comments critical of the lawsuit. I do agree that there was not nearly enough voter education on the downside of the ACC deal. The deal was supported and very well publicized by all the usual political & commercial interests, but the opposition was mostly silent. A few “letters to the editor” were posted in opposition, and there was a web site that listed the negatives, but from my conversations with my neighbors and with others, it was obvious that most people only had heard about the positives. Here’s an example –
    residents of Plum Creek in Kyle receive a monthly HOA newsletter that keeps us informed about community activities and items of concern (rattlesnakes, for example). In the last newsletter prior to ACC election there was an extensive front-page article extolling only the benefits of the ACC deal. The newsletter gave no clue that there might be opposition to the deal. In dismay, I wrote to the editor to ask why the newsletter did not publish information to make readers aware that not everyone considered the ACC deal to be a good thing. Her reply was that she had no idea that anyone opposed the ACC deal. I asked her where her published article had come from and she told me that the DEVELOPMENT (I assume that means Benchmark (or whatever-the-name of the Plum Creek development company is)). To make things even worse, this newsletter was the last newsletter prior to the election, which meant that there was no time for a subsequent newsletter to be sent.
    Anyway, somehow the voters in San Marcos got educated and voted down the ACC bad deal. I’m sorry that Kyle voters failed to do the same.

  6. Texas State does not have the same mission as a community college. TxState is trying to compete with the likes of Texas Tech, UH, & UT branches. They have admissions standards (that have been increasing) that would eliminate many, many people that start at ACC. ACC’s job is to prepare students for places like TxState and to provide vocational ed options.

    I don’t know if you heard, but a HS diploma is mostly useless these days. Apparently most of you are unwilling to pay anything to support your local students beyond that so they can get decent jobs or transfer to university. TxState services largely non-native students. Local graduates that have qualifications and money go elsewhere, those lacking either or both are the people who would use community college. Before the vote, Hays county students had no CC option; they had to move to SA or Austin to get in-district tuition. San Marcos students still face this situation.

    If you folks don’t want community college, fine. Say so. If you want a different community college, take it up with the state legislature. They drew the service area maps, not ACC. I’ve taught classes at 5 community college districts in Texas including ACC, believe me they are all about the same, but actually ACC is one of the better ones. Alamo colleges actually performs worse than ACC in most outcomes, charges higher taxes, and is $1 billion in debt. That’s largely due to a brand-new campus that failed accreditation and won’t be up for it again until 2013.

    I’m tired of the character assassination of ACC as if it’s some sort of pyramid scheme or predatory organization. If it is, then all community colleges are since every one that I’ve worked for has a similar ethos. ACC offered more than enough information regarding annexation on its website, and Texas Association of Community Colleges links to information regarding each CC’s finances, tax rates, budgets, revenue statements, master plans, etc… All of that is public information and available online if you look. It’s the voters responsibility to educate themselves.

    The way the state budget is looking many of you will get your wish and community colleges will downsize while trying to service an increasing number of students.

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