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Ventura County

Local Colleges Get a Strong Credit Rating

Education: Some feared that complaints of excessive spending by the district chancellor would jack up the interest on a $365-million bond that voters passed in March.

July 11, 2002|MARGARET TALEV and AMANDA COVARRUBIAS | TIMES STAFF WRITERS

Despite controversy swirling around Chancellor Philip Westin's spending practices, the Ventura County Community College District received a strong credit rating Wednesday on a voter-approved $365-million bond that will be used for improvements at the district's three campuses.

Moody's Investors Service granted the district an "Aa3" bond rating, a slightly above-average rating for community college districts and one considered "very strong" for municipal bonds, said Kevork Khrimian, vice president and senior analyst at Moody's in New York.

The rating should keep borrowing costs at under 5%, said Robert Barna, an L.A.-based investment banker representing the district.

Calling the Moody's rating "wonderful news," Westin acknowledged his concern that recent accusations of excessive spending by him could translate into a higher lending rate for the college district.

Westin has been the source of public outrage for ringing up more than $119,000 in business-related expenses from 1997 to 2001. Some critics have called for his resignation, saying they never would have voted for the bond if they had known about the chancellor's spending habits.

Despite his troubles, Westin said the strong bond rating was a victory for the college district.

"This bond is the most important thing for this district, in my opinion, since the district was founded, and I didn't want anything to jeopardize that," he said. "With this bond, we'll be able to fix all of our facilities' needs throughout the county for the next 30-plus years."

Khrimian said the bond rating is based largely on Ventura County's strong and diverse economic base, and residents' relatively high income levels. Interest on general obligation bonds is paid by assessments to taxpayers.

Standard & Poor's was expected to release its bond rating later this week. The college district plans to take the first phase of the financing plan--$105 million--to market during the week of July 29.

Khrimian said district officials were upfront about the Westin controversy and that Moody's also conducted its own research. He said the bond-rating agency determined that the chancellor's problems would not affect the district's long-term finances.

"It's not a credit factor," Khrimian said. "It does not have a bearing on the district's willingness and ability to pay back bond holders."

County voters approved the bond in the March 5 election.

The day after, the college board of trustees received a detailed report of Westin's expenditures and asked for his resignation. The board then reversed itself, deciding instead to conduct its own audit.

When the study revealed no criminal wrongdoing, the trustees voted 4 to 1 to renew Westin's contract through 2006. They also awarded him a 16% raise, bringing his salary to $203,000.

Khrimian said the trustees' renewal of Westin's contract instilled confidence among Wall Street analysts that there was trust and stability in the district.

"He's been rehired," Khrimian said. "He's gotten a four-year contract since then. So it all seems to be water under the bridge."

Westin's troubles are not quite over, however. The board of trustees has called a closed-door meeting on Tuesday to discuss the chancellor's fate.

Even if the trustees were to fire Westin or ask for his resignation, Khrimian said, it would not affect Moody's rating.

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