MCC: No need to tap taxpayers

CRYSTAL LAKE – McHenry County College officials maintain that a $42 million proposed expansion can move forward without using taxpayer dollars or going to a referendum.

Though the college has been criticized for its plan at public meetings and in letters to this newspaper, several board members say a property-tax increase or referendum would be looked at only as a last resort.

The college is looking to expand its health and wellness curriculum with a 120,000-square-foot building for classroom space, a health clinic and a fitness center.

“There’s no referendum on the table, especially in today’s economic times,” MCC Board Chairwoman Mary Miller said. “If we couldn’t build a $42 million [facility], then we would scale it down.”

But recent letters to the Northwest Herald editor have blasted the college’s plan, calling it a “cruel hoax” that likely will result in tax increases. One letter writer said the college’s annual levy increases already are “squeezing the taxpayers” in a difficult economy. Under the recently approved tax levy, the college asked for the maximum allowed the tax cap at a time when many municipalities sought flat, or in some cases lower, levies.

A feasibility study is under way by Power Wellness, which will recommend whether the project should move forward. The Addison-based firm will survey whether a need exists and identify potential partners to help pay for it. MCC paid Power Wellness $50,000 to conduct the study.

“We’re trying to, as an institution, be very frugal and not go to the taxpayers for any kind of referendum until we’ve exhausted all sorts of possibilities of getting the facilities we need through other means,” MCC President Vicky Smith said.

“There’s a lot of funding streams that can be used that don’t require us to go to referendum or to go to local taxpayers,” she added.

Those options include issuing debt certificates, which would be paid for out of the college’s operating fund, which is subsidized primarily through local tax dollars. Another course of action is alternative revenue bonds repaid with any income the expansion could bring in, such as tuition, student fees and memberships to the fitness center.

Critics have called alternative revenue bonds nothing more than a back-door referendum because the college can issue those bonds without first asking taxpayers. If it turns out that the project is not self-supporting, taxpayers then must shoulder the debt.

“It’s only a back-door referendum if the revenue that’s coming in doesn’t pay off the bonds,” Smith said. “This board wouldn’t move forward with that sort of approach if they weren’t totally assured that there was a revenue stream coming in, a non-tax revenue stream coming in.”

Still, alternative revenue bonds carry a certain risk. A similar funding mechanism was used to subsidize Lakewood’s RedTail Golf Course. When it turned out the golf course was not taking in enough revenue to pay off the debts, taxpayers were left footing the bill until 2011 when the bonds were paid off.

The college hopes a partnership with private entities to operate a health clinic and fitness center can help pay for it. Potential partners the college identified include local health care providers such as Centegra Health System, Mercy Health System and Advocate Good Shepherd Hospital.

Though Power Wellness was hired to study whether the expansion is even possible, Smith and Miller said they hadn’t ruled out the firm as a potential financial partner. Trustee Ron Parrish said that option “smells bad.”

“I would resist that,” he said. “I would rule them out, because I would see it as ... a conflict.”

Parrish sits on a 16-member oversight committee made up of high-level college officials, faculty, MCC’s architect and Power Wellness representatives.

Smith maintains that MCC’s agreement with Power Wellness is legitimate.

“If there was any smell of inside track or conflict [of interest], it would be squashed,” she said.

Power Wellness has worked with other public institutions, most recently Moraine Valley Community College on its own athletic complex that mirrors what MCC is exploring.

Power Wellness also conducted a feasibility study for Moraine Valley’s expansion, and have been considered to operate the fitness center portion of it. Other potential firms interested in running the fitness center still are being considered, Moraine Valley’s spokesman Mark Horstmeyer said.

What’s next?

McHenry County College’s feasibility study will continue with surveys sent to students and other targeted demographics. A commercial Realtor will explore site options at existing, vacant facilities. And Power Wellness will continue to identify potential private partnerships. College officials expect the feasibility study to be completed sometime this summer, possibly in June.

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