Lake Tahoe Community College raises $15M in 2nd round of Measure F bond sales
February 18, 2018
Lake Tahoe Community College successfully issued its second set of bonds for sale as part of the Measure F general obligation bond.
The college, after receiving high marks for a second time from both Standard & Poor's (S&P) Financial Services and Moody's Investor Service in their bond ratings reports, sold $15 million in its second series, according to LTCC. The sale will provide funding to continue improvements to campus facilities and technology, and to modernize classrooms to improve student learning, per the Measure F bond language.
Prior to the sale, S&P raised the college's long-term rating from "AA-" in 2015 to "AA," an upgrade that reflects LTCC's track record of consistent financial practices, strong available fund balances, excellent projection modeling, and sound fiscal management, according to the college.
The rating agency also noted South Lake Tahoe's extremely strong property values, reflecting the significant amount of revenue stemming from property taxes on second homes in the area. Other factors that led to the improved rating included LTCC's strong available reserves thanks to the board of trustees' policy of maintaining at least 10 percent of general funds in a reserve account.
Moody's reconfirmed LTCC's A1 rating and improved its outlook from stable to positive based on LTCC's sizeable and primarily residential tax base, which is growing. In addition, Moody's mentioned LTCC's strong and consistent management team, its low Other Post-Employment Benefits (OPEB), and moderate pension burdens as factors in their A1/positive rating.
"These are really positive ratings that reflect our strong financial practices over many years," LTCC Superintendent/President Jeff DeFranco said in a statement. "We're in great fiscal shape, and Moody's and Standard and Poor's definitely recognize that fact. It's nearly unheard of for a school our size to see these kinds of rating upgrades in just a few years. And to get the bond ratings news just after learning that we had our accreditation status reaffirmed at the highest level is hugely gratifying, and a testament to the college's exceptionalism."
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LTCC's ratings place it at the top of the smallest eight colleges in California's community college system, a group LTCC often compares itself to based on many shared factors, according to the college. The ratings also put LTCC in the company of some of the higher bond rated colleges in the system, including schools located in urban centers that benefit from their location.
"Our ratings results are outstanding, especially considering the size and relative isolation of our college and town," LTCC Vice President of Administrative Services Russi Egan said in a statement. "We often say around campus that LTCC is 'small but mighty' — this news is yet another positive sign coming from outside the Basin that the college is doing its job exceptionally well."
DeFranco and Egan together presented to both Moody's and S&P on Jan. 22.
LTCC's first issuance of Measure F bonds was in July 2015. Morgan Stanley is acting as the underwriter for the bond.