Maintenance Tax Election

Maintenance Tax Election

Spend a penny now.
Save an estimated $4.3 million later.

This election could allow COM to refinance its maintenance tax notes and save millions.

Make it count November 3, 2020

The College of the Mainland Board of Trustees has approved a November 3 election for the purpose of refinancing the college’s maintenance tax notes. If the proposition is passed, the refinancing would save taxpayers an estimated $4.3 million in interest over the life of the college’s existing bond debt.

Additionally, if passed, the refinancing will serve as a fiscally responsible action that:

  • Allows COM to take advantage of the market’s historically low interest rates by exchanging its existing $16 million higher-interest tax note for a lower-interest rate.
  • Could decrease COM’s interest rate from 4 to as low as 1 percent.
  • Saves the college nearly $250,000 per year in interest.
  • Will not raise student tuition costs.

The refinancing of an existing tax note (also known as a debt or bond) at a lower interest rate is done routinely when a college reacts to changing market conditions and interest rates. By refinancing the maintenance tax debt, that money will essentially be reallocated from the college’s maintenance and operations (M&O) budget to its interest and sinking (I&S) budget at a lower interest rate, allowing taxpayers and the college to see significant financial savings over the life of the bond.

Debt Service Savings Over 17 Years

Current Bond Debt Payment$20,355,500
Projected Bond Debt Payment (If refinancing measure is approved)$15,971,631
Total Savings$4,383,869

Illustration depticts projected debt service savings as prepared by Raymond James Financial.