Regents craft a bonding bill for 2012

The University’s extensive wish list is unlikely to be fulfilled in 2012.

Greta Kaul

The University of MinnesotaâÄôs Board of Regents  put the finishing touches Friday on its wish list of construction projects it will eventually submit to the state.

Among its top priorities for 2012 are $100 million for a new Ambulatory Care Center  on the Twin Cities campus and $90 million for maintenance funding called Higher Education Asset Preservation and Replacement (HEAPR) .

State bonding bills, generally passed in even-numbered years, are major sources of funding for construction projects at the University.

Also included on the list is a renovation of the UniversityâÄôs Old Main Utility  building on the bank of the Mississippi River, a makeover for Eddy Hall , a biological lab and classroom building in Itasca, Minn. and a new American Indian Learning Resource Center  on the UniversityâÄôs Duluth campus.

All told, the University will ask the state to kick in nearly $270 million in bonding money for the projects this session if they approve the request in October. The University itself would pitch in about $140 million.

But the lingering question is whether a bonding bill will come out of the 2012 legislative session. If one does, it will likely be smaller than the average bill, which seems to be what the University is bracing for. It hinges on financial forecasts in November and February.

 

How big a bonding bill?

Weighing in at $500 million, the bonding bill from summerâÄôs special session was uncommonly large for an odd-numbered year, when bonding bills arenâÄôt typically passed. It provided funding for the UniversityâÄôs new Physics and Nanotechnology Building, light-rail mitigation and $25 million in HEAPR funds.

There isnâÄôt a whole lot left over in the two-year budget for 2012, said Sen. David Senjem, R-Rochester. Senjem, who chairs the SenateâÄôs Capital Investment Committee, predicted that a 2012 bonding bill would near the $400 million mark.

With $915 million in bonding approved for the two-year budget cycle, and $500 million of it committed in the special session, only about $415 million remains.

The University and Minnesota State Colleges and Universities  usually share a third of state bonding bills. A $400 million bill would put the UniversityâÄôs share at just $133 million.

But according to debt service guidelines by Minnesota Management and Budget, a $775 million bonding bill would be financially sustainable, said Rep. Alice Hausman, DFL-St. Paul. She wants MinnesotaâÄôs business community to put pressure on legislators to authorize more bonding money in the upcoming legislative session.

 

Projects on campus

The ambulatory clinic is designed to centralize and update  some of the UniversityâÄôs disparate and overcrowded clinics on campus.

Hausman questioned the wisdom of building a new medical facility in a recession, as it would compete with other regional hospitals, she said.

Others argue the clinic could bring money into the University.

âÄúClinical revenue is used to recruit and retain quality faculty,âÄù said Kathleen OâÄôBrien , vice president of University Services.

Already through its preliminary planning stages, OâÄôBrien pitched the care clinic as a project that would create jobs in Minnesota, as would the UniversityâÄôs less-developed bonding projects, she said.

âÄúThereâÄôs been a tremendous downturn in architecture and engineering projects in Minnesota,âÄù she said.

The board wants to turn the Old Main Utility building into a multi-utility plant âÄî one that would provide steam, electricity and chilled water to the Minneapolis campus to shield against increasing utility rates. The Old Main building has been decommissioned for more than a decade.

The University hopes to renovate Eddy Hall,  the oldest standing building on campus, as part of a plan to demolish Williamson  Hall. If the project is funded, the 130-year-old brick building would house some of WilliamsonâÄôs admission programs.

Stacked odds

Senjem is not optimistic about fulfilling all of the UniversityâÄôs requests.

 âÄúWithin the sphere of the $415 million, weâÄôre not going to have a lot of money to âĦ build new buildings,âÄù he said, noting that Minnesota has a lot of roads, bridges and wastewater infrastructure in need of renovation. âÄúTheyâÄôre going to have to make the case for them.âÄù

But for those at the University who believe the projects are critical, securing funding in 2012 is essential.

âÄúThe tragedy would be if the projects are delayed,âÄù Chief Financial Officer Richard Pfutzenreuter  said. âÄúThen the cost goes up.âÄù