A Critique of McHenry County College’s $42 Million Health Club Expansion Plan – Part 4

This is a continuation of Stephen Willson’s critique of the $42 million health club/classroom expansion proposed by the McHenry County College Board.

Proposition 7: The program won’t raise tuition or property taxes.

Response: False. The program will raise both tuition and property taxes.

These financial assumptions were shown the MCC board members.

These financial assumptions were shown MCC board members.  Included us a new $8 per credit hour fee hike called a “student infrastructure fee.”

The proposal includes an $8 per hour “student infrastructure fee” for ALL students, an increase of 9% in order to finance this project, which will be used by only a small fraction of the College’s students.

This revenue is NOT a result of the new project at all, it’s just a price increase for all students. Calling this a “fee,” rather than a tuition increase is disingenuous at best.

The projected tuition for THIS program covers all operating costs despite the fact that tuition covers only 25% of the budget for all of MCC’s other programs.

If MCC can run this program so cheaply, then why aren’t all their programs paid solely from tuition?

Why do they need any property taxes?

The answer, of course, is that it is not possible.

There is not a community college in the nation where tuition covers more than a third of college operating costs.

No evidence is provided to explain this discrepancy.

The budget also projects millions of dollars from students and local families buying memberships at the big, new health club, with revenue growth rates of 45% and 30% in years two and three.

There is absolutely no evidence in the marketing presentation to support this conclusion.

Nor is there any discussion of competing local fitness centers or any evidence presented that there is substantial unmet demand for fitness centers in the Crystal Lake area, or that this facility will have any sort of competitive advantage.

The projections imply the new health club will take thousands of members away from competing area health clubs, such as Health Bridge.

Given how little the current health club at MCC is used, MCC’s own history contradicts this conclusion.

In short, taxpayers will be on the hook for the budget shortfall and the mortgage payment.

The annual debt service on a $45 million bond issue (which includes money to pay interest for the first two years) would be $2.7 million per year at current interest rates.

Proposition 8: MCC will not ask the voters to raise taxes.

Response: MCC wants to sell property-tax backed bonds without a referendum.

No suggested financing option involves voter approval.

No suggested financing option involves voter approval.

The marketing presentation shows “alternate revenue” bonds being sold before the middle of next year.

“Alternate revenue bonds” are the same kind of bonds Lakewood used for their infamous, taxpayer supported golf course.

“Alternate revenue bonds” were designed to help communities fund capital projects for self-supporting utilities such as water and sewer systems.

The law was never intended for speculative programs such as this.

How can MCC plan to sell such bonds when there is obviously a very large risk that taxpayers will end up footing the bill?

The answer is that all they need to sell such bonds without a referendum is the opinion of a consultant that the program is likely to be self-supporting.

MCC has already found a consultant willing to issue a positive opinion, an opinion for which

  • the consultant will bear zero financial liability,
  • a consultant that has an obvious conflict of interest,
  • a consultant with a strong, vested financial self interest in saying such the proposed program will be successful.

= = = = =
The following are running for the three open spots on the McHenry County College Board:

  • William Scott Alford, Wonder Lake, received December 19
  • Chris Jenner, Cary, received December 26, 2012
  • Carol Larson, Harvard, received December 17
  • Erik Sivertsen, McHenry, received December 26, 2012
  • Mike Smith, Village of Lakewood, received December 17
  • Molly Walsh, Crystal Lake, received December 21
  • Barbara Walters, McHenry, received December 26, 2012
  • Arne Waltmire, McHenry, received December 17
  • Thomas Wilbeck, Lakewood, received December 26, 2012

Incumbents are Carol Larson and Barbara Walters.

Rest assured I shall ask each whether they will vote to sell bonds without asking voters for permission first.

= = = = =

See Part 1 here.

See Part 2 here.

See Part 3 here.

See Part 4 here.


A Critique of McHenry County College’s $42 Million Health Club Expansion Plan – Part 4 — 2 Comments

  1. Did they know the answer before spending $50,000?

    you bet they did they said what the result will be.

    This is like believing teachers strike for the good of the children.

    Class 101 of not telling the truth now in session.

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