Bond Ratings
Credit ratings are used to determine how effectively state and public agencies can fulfill their financial commitments. The AAA bond rating, the highest evaluation possible, signifies that a public agency has a very low likelihood of defaulting on its financial obligations. Fitch Ratings, one of the leading credit rating companies in the world, only awards AAA ratings when a community college district demonstrates an exceptionally strong capacity to fulfill its financial commitments.
On November 15, 2019, Fitch Ratings affirmed the ratings for YCCD. The District has consistently earned high credit ratings, demonstrating fiscal stability and resource management. High bond ratings, like those assessed for YCCD, hold significance because they influence the expectations of investors. When a community college district possesses the AAA rating like YCCD, investors are reassured of the low risk associated with purchasing bonds issued by that entity. Conversely, lower ratings indicate a higher level of risk, compelling community college districts with lower credit scores to offer higher interest rates to attract investors to buy their debt. Consequently, college districts with lower credit scores incur higher costs when issuing debt. Due to YCCD’s high credit rating, the District has incurred less debt and maximized taxpayer investments.
The General Obligation (GO) refunding bonds (series 2016A) were rated ‘AAA’, while the Issuer Default Rating (IDR) was rated ‘AA-‘ with a stable outlook. The ‘AA-‘ IDR reflects the district’s stable enrollment and related revenues, as well as its low long-term liability burden compared to its resource base. Fitch projected the district’s operating performance to remain sound, with balanced financial operations and stable to modestly growing reserves. The District’s revenue framework is rated ‘A’, with steady revenue growth due to improved state economics and stable full-time equivalent student enrollment. The expenditure framework is rated ‘AA’, indicating the District’s ability to adjust spending to match revenues.
Issuances
Measure J, Series A, B & C
Measure J Series A and B bond issuances occurred in 2007. The issuance included $29.50 million for Series A and $65.49 million for Series B. The Series A issuance provided $20.75 million from current interest serial bonds (CIBs) and $8.75 million from capital appreciation bonds (CABs). The Series B issuance provided $50.35 million from CIBs and $15.14 million from CABs. In 2011, the Series C issuance provided $30.30 million from CIBs and $4.63 million from CABs. Through prudent fiscal management of bond dollars and by leveraging state matching funds, the District spent $131,779,155.34 of the $190 million in the first three bond issuances, leaving the balance for additional capital projects.
Measure J, Series D
In 2016, the District issued Measure J, Series D Bond Funds in the amount of $26.5 million to leverage state dollars and meet matching fund requirements for the Woodland College Performing and Culinary Arts Facility.
Measure Q
In 2019, the District re-issued the remaining $33,535 million of bond funding from Measure J. Measure Q funds are being used to finish the construction of the Woodland College Performing and Culinary Arts Facility and finalize priority infrastructure and code-compliance related priorities