Regents approve River Campus bonds, room and board increase

Bonds for academic and residence space at the River Campus -- and an increase in the university's room and board rates -- were unanimously approved at a Friday meeting of the Southeast Missouri State University Board of Regents.

Regents issued the bonds to fund construction of a three-story, L-shaped building close to the Seminary Building. With an estimated cost of nearly $24 million, the project will add more than 96,000 in gross square footage to combat what Southeast officials have described as overcrowded academic space and the need for housing and dining facilities for arts majors who do the majority of their study at the campus. The project also includes a nearby parking area to be built on the north side of Morgan Oak Street.

"As mayor, I fought hard for the River Campus to become a reality at Southeast," said newly appointed regent Jay Knudtson, who served as mayor of Cape Girardeau from 2002 to 2010. "I couldn't have envisioned the success it turned out to be. It's gratifying to see it continue to expand."

The project cost estimate is based on a construction schedule that would require bids to be let for the site work by March and the facility available for occupancy for the fall 2014 semester. Bonds will cover construction of the building, with annual revenue from housing contracts and meal-plan commissions used to service the debt for the housing portion of the construction cost. Additional tuition revenue from more majors at the River Campus will fund the debt service associated with the academic space in the new facility.

Julie Portman, representing the university's financial advisers, Edward Jones in St. Louis, said Standard & Poor's rating services had assigned a strong "A" rating with a stable outlook to the bonds Southeast will issue for the project.

"We expect all of the bonds to be sold by the end of next week," Portman said.

The financial rating allows the university to finance the project at a low cost, said Southeast president Ken Dobbins.

"What's important is that we can have projects at a reasonable price," Dr. Dobbins said. "We're going to provide our students with the space they need, and our financial rating is a reason why we're able to do so."

The most recent expansion projects by the university were announced in 2011 for construction of a residence hall and its related chiller and boiler plant near the Show Me Center; financed with $29 million in revenue bonds. Annual revenue from housing contracts, meal-plan revenue and other facets will be used to retire the bonds. The hall is expected to be completed by the fall semester.

Regents also approved increases for room and board rates and technology fees in the 2014 budget year. The board approved a 2.65 percent increase in the room rate, which was called necessary because of costs of staff, student labor, maintenance and repair. The uptick brings the average cost of a residence hall room at Southeast from $5,171 to $5,358 per academic year. The board rate, reflecting inflation in food prices and Southeast's dining contract with Chartwells Inc., will increase 3.5 percent, with the cost of the average meal plan rising from $2,404 to $2,517. The residence hall technology fee will rise from $50 per academic year to $60; it is attributed to the purchase of new routers and a new bandwidth arbitrator.

Room and board rates at Southeast have been on the rise. The university increased room rates 2.43 percent and board rates 4.96 percent in the 2013 budget year, and raised room rates 3.37 percent and board rates 4.26 percent in the 2012 budget year. Tuition rose 3 percent for in-state students and 6 percent for out-of-state students, partly in response to anticipated decreases in state funding, for the 2012-2013 school year. The university also has pursued cost-cutting measures such as changes to employee benefits, eliminating vacant positions, replacing retiring tenured faculty with nontenured instructors, reducing operating budgets and combining academic programs.

The board also approved an incidental fee rate equal to the in-state rate for all non-Missouri veterans and their spouses and dependents effective for the fall 2013 semester.

klewis@semissourian.com

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