Daily Independent (Ashland, KY)

Local News

January 10, 2013

Universities allowed to issue construction bonds to be repaid from their own funds

FRANKFORT — It was all fuzzy and warmhearted praise of a new spirit of bi-partisan cooperation Thursday morning at a press conference to announce permission for the state’s universities to issue construction bonds to be repaid from their own funds.

University presidents, a host of lawmakers from both parties and chambers, and Gov. Steve Beshear announced their intention to pass legislation, allowing six universities to issue $363.3 million in bonds to fund renovation or construction projects at no cost to taxpayers of the state General Fund.

When speakers weren’t touting the impact on the state economy and higher education, they were praising the agreement for its bi-partisan support.

University presidents have for years called for the authority that is enjoyed by public universities in as many as 38 other states.  Rep. Bob Damron, D-Nicholasville, has for nearly as many years tried to pass legislation to allow them that authority.

But other lawmakers, principally the Republican Senate, have in the past balked because they said the bonding would count against the state’s bonding capacity affect the state’s bond ratings.

Even bonds were to be repaid by revenues generated solely by the universities from student fees or sales had to be approved by the General Assembly.

But with new Senate President Robert Stivers, R-Manchester, and House Speaker Greg Stumbo, D-Prestonsburg, standing next to the university presidents, Beshear said lawmakers had agreed on “a great deal for the state.”

The universities, he said, “want to pay for it themselves — as in they don’t want a dime from the state.”

Everyone, university presidents, the governor and lawmakers praised the agreement as an indication of a new bi-partisan spirit.

Stivers , who had discussed the idea with his caucus, said, “It has been well-received.”

Senate Majority Leader Damon Thayer, R-Georgetown, who in the past has resisted adding to state debt, said Thursday he has no problem with the new plan.

“In the past, what we did not allow them to is to have carte blanche,” Thayer said. “This is a strong business plan linked to revenue of their own.”

The projects reflect the priority capital needs of the universities and a collaborative request from all of them, even though only six universities will sell bonds for projects. Eastern Kentucky University and Kentucky State University presently have no agency-funded projects ready to begin construction, but their presidents signed the letter in support of allowing funding for projects at the six other institutions.

Among them are $9.2 million for renovation of South Mignon Hall student residence at Morehead State, $22 million for a new honors College and international Center at Western Kentucky and $275 million for a new science building, a renovated Gatton School of Business and renovations to the Nutter Training Center and Commonwealth Stadium at the University of Kentucky.

WKU President Gary Ransdell, who has led the fight by the presidents to have their own bonding authority, said the projects can get underway as soon as the requisite legislation passes in the legislature. He said it’s a one-time grant of authority.

Ransdell, like Beshear, praised the cooperative, bi-partisan spirit that allowed all parties to agree and called it “a great opportunity for higher education.” He said the 11 projects “represent the critical need areas on our campuses.”

One of the University of Kentucky projects, the Academic Science Building, will receive $65 million from the UK Athletics department to pay off the $100 million cost. UK President Eli Capilouto said that may be a first and praised UK Athletics Director Mitch Barnhart.

Postsecondary Education has seen its funding from the state cut 15 percent in the past three budgets and the current budget contained no capital projects for the university, even those which would have been paid from university funds without tax dollars.

Morehead State President Dr. Wayne Andrews said the university will renovate Mignon Hall, a student residence hall, as part of its 10-year, $25 million plan to upgrade student residence facilities.

“It’s important for us because these are your children,” Andrews said. He said the last new residence dormitory at MSU was constructed in 1969.

Andrews said he looks forward to a legislative session “where we can work together for the benefit of Kentucky.”

Beshear also said the agreement “truly has been a bi-partisan effort.”

Stivers succeeded David Williams as Senate President after Williams accepted Beshear’s appointment to a circuit judgeship. Stivers has said he wants a different tone in Frankfort, and so far has seemed to go out of his way to set that tone.

He hosted a lunch for all senators and staffs from both parties Wednesday and, unlike Williams, allowed Democrats to make their own committee assignments.

Andrews said Stivers should be credited with “a change in attitude” which is already felt in the capitol.

“I think Sen. Stivers brings a can-do attitude to the table,” Andrews said.

The other projects contained in the proposal are: Murray State, $15.4 million for renovations and upgrades to several facilities, mostly dormitories; Northern Kentucky University, $45 million for renovation and expansion of the Albright Health Center and $12 million to purchase and renovate a residential facility to house students; University of Louisville, $9.6 million to renovate the student activities center.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort

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