Jan. 11, 2013 — Gov. Steve Beshear, joined by a bipartisan group of legislative leaders and state university presidents, Thursday announced a plan to approve the issuance of bonds by Kentucky’s public universities for campus improvements supported by university revenues.
These agency bonds will be issued by the individual universities over the coming months, and will allow the schools to fund critical renovation or construction projects at no cost to Kentucky taxpayers.
Gov. Beshear and the lawmakers plan to authorize $363.3 million in agency bonds, which will have an estimated economic impact of nearly $623 million and support 5,110 jobs. A bill will be filed soon to authorize the bonds.
“Agency bonds will meet the growing needs of our universities with no impact on the General Fund, as they will be paid for through existing revenue streams such as student fees and athletic revenues,” said Gov. Beshear. “I appreciate the universities’ continued good stewardship during these tough economic times. At a time when we are pushing our students to pursue higher education, it’s imperative that they have adequate classrooms, housing and facilities, and the issuance of these bonds will accelerate those projects to meet those needs quickly.”
General Fund support for the universities were cut 15 percent during the last three biennial budgets. Universities need the authority to utilize other revenues to maximize student opportunities, including needed facilities that may be built or improved without general fund revenues from the state. The bonds were proposed in the last legislative session but were not authorized. No new fees are proposed to support the bonds.
"I am pleased and thankful that the governor and legislative leaders support this initiative,” said Morehead State University President Wayne Andrews. “It will enable Morehead State University to continue to update residence halls for our students at no cost to the taxpayers of Kentucky.”
MSU’s bonds will be used for the Mignon Hall (residence hall) renovation, which is estimated at $9.2 million.
Kentucky’s eight university presidents are united in support of the plan, noting that accelerating these long-delayed projects will save money in construction costs and avoid additional cost burdens for students. Each school enjoys strong bond ratings, and the schools will be able to guarantee the bonds through existing revenue streams at a reasonable cost.
“The Council on Postsecondary Education and Kentucky’s public universities are very grateful for the support of the governor and legislative leaders for these projects,” said Council on Postsecondary Education President Bob King. “We also appreciate the confidence this action expresses in the judgment and leadership our campus presidents demonstrate in meeting the needs of our students, faculty and staff.”
The proposal includes 11 construction projects at six institutions that are ready to be financed and will move forward as soon as authorization is given by the General Assembly. Several projects will address outdated or inadequate student housing; others will improve existing classroom spaces. University presidents said these projects will provide a safer experience for students and faculty, improve campus quality of life, and avoid additional cost burdens for students.
Each of these projects is already in some form of planning by the universities, and some have initiated design work. Construction for most projects will begin this calendar year.
The projects to be supported by agency bonds include:
Morehead State University, Mignon Hall (residence hall) renovation, $9.2 million;
Murray State University, Hester College dormitory renovation, $9.9 million; College Courts housing sprinkler system upgrade, $590,000; capitol renewal projects (assorted facility improvements), $4.9 million;
Northern Kentucky University, residence hall acquisition and renovation, $12 million; Albright Health Center renovation, $45 million;
University of Kentucky, Gatton College of Business and Economics renovation, $40 million (plus $25 million in cash raised by UK through private philanthropy); Commonwealth Stadium renovation, $110 million; Academic Science Building construction, $100 million ($65 million of which will be supported by athletics revenue);
University of Louisville, Student Activities Center renovation, $9.6 million;
Western Kentucky University, Honors College and International Center construction, $22 million.