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Gavilan College’s Board of Trustees voted unanimously to refinance the Measure E bonds at its March 11 meeting. Gavilan’s financial advisory team said the move will save taxpayers within the district $3.4 million over the life of the bond.
Gavilan’s board originally passed the bonds in 2004, as Measure E, which raised funds to construct and modernize the college’s Gilroy facilities. It was also set to fund the establishment of a new campus in San Benito County. The bond came in a set of three series: A, B, and C. The board later refinanced the ‘C’ series of Measure E bonds in 2015, and had the chance to do so again in 2025. The district originally issued $50,000,000 for the ‘C’ series, which are active, or mature, through August 2032.
Through the refinancing process, districts can issue new “refunding” bonds that replace the original bond. The new bonds reflect the interest rates in effect when they’re issued, and refinancing is typically recommended when interest rates are lower than when the bond was originally issued. The change from a higher interest rate to a lower one is how taxpayers save money from the refunded bonds.
Because interest rates are lower, the district would owe bondholders less after refinancing. The district would then appropriate lower property taxes because it would owe bondholders less. The refinancing does not extend the term of the bond, which ends in 2032.
Gavilan’s financial advisory team estimated that investors would begin buying the new refunding bonds around April, which would lock in the new interest rates at 2.99%. The previous interest rate was 5%.
The board also approved a contract with CalWORKS to subsidize employment opportunities for students off-campus. CalWORKS is a welfare program helping California residents in need. The program will provide for 10 internships and 15 positions for work experience opportunities.
The March 11 Board of Trustees meeting was the first held at Gavilan’s new Hollister campus. It’s the only meeting scheduled to take place in Hollister in 2025. The board’s remaining monthly meetings are scheduled to take place at the Gilroy campus.
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