In response to economic factors and enrollment slowdown, the Lone Star College System has delayed the construction of several 2014 bond projects and paid off millions in bonds to save taxpayer money.
The delayed campus facilities include a $5 million oil and gas training center planned at the LSC-Tomball campus, said Amos McDonald, vice chancellor of government and public relations at LSCS. Plans for the center included a rig for drilling, hydraulic fracturing and engineering technology, according to the bond referendum.
“We know that job demand [in the oil sector] is down,” McDonald said. “We are still teaching oil and gas on a regular basis, but the demand to build out a center—we don’t see it today. We want to make sure we’re fiscally responsible.”
The Lone Star College-Tomball Oil and Gas Training Center was originally set to be complete in fall 2017 but has been postponed until the market recovers.[/caption]The college has partnered with oil field services company Baker Hughes in Tomball with a two-year lease to train students on the company’s practice oil rig in lieu of the facility, McDonald said. The need for a campus facility will be re-evaluated according to demand in the oil industry in the future.
LSC-Tomball purchased 18 acres of land in early 2016 for the center as part of a larger 600-acre Harris County development near Hwy. 249 and Holderrieth Road. LSC-Tomball President Lee Ann Nutt previously said the center was tentatively scheduled to be complete in time for the fall 2017 semester.
LSCS Chancellor Steve Head said the college system monitors market conditions to delay construction on facilities that are not immediately needed and to refinance bond debt when better rates are available.
The district saved $81.35 million over the life of the bonds through refunding and paying off previously issued construction bonds in July. A total of $46.5 million was saved through refinancing bonds at a lower interest rate, and $34.65 million was saved by paying bonds ahead of schedule using the system’s fund balance, McDonald said.
Refinancing and paying off bonds early will result in lower payments on the taxpayer-approved bonds, LSCS Media Relations Manager Bill Van Rysdam said.
“Think of it as refinancing your car loan to a lower interest rate. Your payments will be smaller and save you money,” Van Rysdam said.
During an Aug. 4 board meeting, the LSCS board of trustees approved a $347.7 million budget for the 2016-17 school year.
Public hearing for the proposed tax rate of $10.78 per $100 of valuation were held Sept. 14 and 19. The board will make a final decision during the Oct. 6 board meeting.
