In March 2004, voters in the Gavilan Joint Community College District approved the issuance of $108 million in general obligation bonds to improve and expand facilities for the college district. Measure E bonds have been used to renovate instructional facilities on the Gilroy campus, upgrade infrastructure, and improve accessibility for students with disabilities. Land for future campuses has been purchased at the northern and southern ends of the district, including a plot of land across the street from the Ridgemark Golf and Country Club near the intersection of Fairview Road and Airline Highway.

The Election of 2004 bonds were issued in four series (Series A, Series B, Series C, and Series D) from 2004 to 2011. Similar to a home mortgage, bonds may be refinanced when interest rates fall in order to reduce the ongoing interest payments. The Series A bonds were refinanced in 2012 (saving $2.5 million) and the Series B bonds have been fully repaid.

This year, General Obligation Refunding Bonds were issued to refinance the 2004 Series C Bonds of which $50 million were issued in 2007. Through 2015, $3.09 million was repaid through annual property tax assessments.  $1.425 million of the Series C bonds were not eligible to be refinanced and will be repaid in August 2016 and August 2017 as originally issued.  The remaining $45.485 million of Series C bonds were refinanced. The 2004 Series D bonds remain outstanding and may be refinanced at a later date dependent on future interest rates.

The 2015 Refunding Bonds have been rated by both Moody’s (Aa2) and S&P (AA-). The average interest rate — the true interest cost — on the 2015 Refunding Bonds is 3.38 percent versus an average rate of 4.73 percent on the refinanced Series C bonds. The lower interest rates from the refinancing generated total savings of $3.5 million.  

This reduction in interest payments is now being passed on to taxpayers in the form of lower annual property tax assessments for the Election of 2004 bonds.