BEATRICE – Southeast Community College has started discussing financing options for the next round of college facility improvements.


The SCC Board of Governors met in Beatrice Tuesday with an investment banker…about upcoming residence hall proposals at the Lincoln and Milford Campuses….along with a planned construction technology facility at Milford, an Agriculture Center at Beatrice, and a potential Science Tower at the Lincoln Campus.


The college has used revenue bonds backed by student fee revenue, certificates of participation, or COPs funding… and private donations.  Scott Keene of Piper Sandler and Company says past SCC revenue bond issues have carried a solid rating.


"The state statutes in Nebraska are very specific. Revenue bonds can only be issued for four types of projects...dormitory projects, parking projects, student union and rec facilities and health facilities. That is it. If we're financing any kind of project that doesn't fall into one of those four categories, we have to find an alternative financing method."


So-called COPs financing can be used for academic buildings, not supported by fee revenue. They are backed by part of the college’s allowed two-cent capital construction levy.


When community colleges had their property tax authority for general operations replaced by state aid in new law…bonds supported by general tax support that require a public vote, went away. SCC currently has three revenue bond issues outstanding backed by fees… and two financed by COPs funding.


"We have just under $49 million of revenue bonds outstanding right now, and those bonds are callable sometime between 2025 and 2028. We're getting fairly close to having the opportunity for refinancing that debt...if we end up seeing lower interest rates in the market place. Our two COPs financings are outstanding of just under $83 million and they are callable between 2028 and 2031."


How much SCC can borrow is based on various revenue streams. "Right now, SCC has very strong capacity for doing additional revenue bond debt, mostly because your dormitories are all full, you're generating a tremendous amount of revenues from the dormitories themselves, and you have waiting lists. That's a critical aspect as well, because it gives future investors comfort that there is enough demand for your facilities to fill up the next dorms you build. The other strength of your finances are the significant amount of student fee revenues that you generate."


As enrollment has grown, so has student fee revenue. Southeast enrollment this fall is up about 10-percent over the fall semester a year ago. The Milford Campus enrollment has grown 50-percent over five years.


Keene spoke about the interest rate market of the past few months and what is coming up. "Starting in September, we saw interest rates spike up....having to do with some concerns whether the Fed was really going to be able to get their arms around the inflation problems that were in the country, but also some concern on the fiscal side with regards to the federal government's spending levels. We've seen rates pop up since September, but the expectation is we'll begin to see them starting to come back down."


Southeast Community College currently uses just over a half-cent of the college’s two-cent capital levy to help finance projects. Growing property valuation in the school’s 15-county service area has also expanded the college’s capacity for bond financing.