Sen. Crowell wants details how SEMO would pay back bonds

Tuesday, December 7, 2010
Students walked across the campus of Southeast Missouri State University with Academic Hall behind them in this file photo. (Fred Lynch)

State Sen. Jason Crowell wants Southeast Missouri State University to show him the money.

In a letter to Southeast president Dr. Ken Dobbins, Crowell, a Cape Girardeau Republican, requests Dobbins provide "in detail, the revenue stream or source" that will be used to pay off $58.2 million in bonds for a campuswide maintenance and renovation plan. The university's board of regents is expected to finalize the borrowing plan at its meeting Wednesday afternoon.

"I want to know whether or not it is the University's intention to request now or in the future state appropriations to pay off these bonds," Crowell wrote in the letter, dated Nov. 23.

Early Monday afternoon, Crowell said he had not received a response to his inquiry, asserting he was growing concerned that administrators didn't "have a clue" how to pay for the loans, that taxpayers ultimately would get stuck with part of the bill -- similar to another big-ticket Southeast project.

"SEMO has not acknowledged me at all," Crowell said. "Before you issue the bonds, tell us how you are going to pay for them. ... I want to get them on record and hold them accountable to that so they don't change their story."

Dobbins said Monday that a letter with the breakdown of the bond funding stream has just been mailed out to Crowell, but he countered that the information has been a matter of public record since the board of regents approved the renovation plan in October.

"We have seven sources of funding, and none of them are from state appropriations," Dobbins said. "We think we are trying to be good stewards of these state buildings."

The maintenance project, slated to begin next year, includes a $22.78 million upgrade of the campus' century-old Academic Hall and a nearly $18 million renovation of Magill Hall, the university's science building.

In a faxed copy to the Southeast Missourian, the university outlines its proposed debt funding sources, totaling $3.47 million per year. About two-thirds of the funding would come from an $11 per credit hour increase in the student general fee for maintenance and repair, including a $5 increase recently approved by the university's Student Senate. Debt service also would be paid for through power plant savings, retirement of existing debt and utility usage.

Crowell voiced concerns that Southeast leadership will borrow money expecting state taxpayers to pick up part of the tab, as he said the university did with its River Campus project, similar in cost to the renovation plan. Despite not having revenue streams lined up to pay for the debt, Crowell said, the board of regents borrowed the money, "betting on the come" of state funding that wasn't there.

"If you and I did that, that's called writing a hot check and Morley Swingle would put you and I in jail," Crowell said, referring to the Cape Girardeau County prosecuting attorney.

Dobbins said regents agreed the River Campus was a project the board wanted to see move forward, despite state funding in limbo.

"It's ironic that the River Campus would not be built if the board of regents had not approved the bond," he said. "Does [Crowell] want to put those board of regents members in jail? Those bonds were issued by the state agency, and there wasn't anything that precluded them from doing that."

Crowell acknowledges that to be the case but that the matter left a bad taste in his mouth. He forwarded legislation that demanded universities could only issue bonds after spelling out how to pay for the debt.

While Dobbins said the senator's question on funding sources is legitimate, his concerns are moot. He pointed to the recent opinion of St. Louis-based bond counsel Gilmore & Bell P.C., noting that, under existing law, Southeast's bonds have been "duly authorized, executed and delivered by the Authority and are legally binding," and that the bonds do not constitute a "debt or liability to the state or any political subdivision."

Crowell said he just doesn't want any funding surprises down the road.

"Taxpayers are owed an explanation," he said, "and I want to make sure the university has thought about how they are going to pay for it and that they are on the record before they issue the bonds."

mkittle@semissourian.com

388-3627

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