RIVER CAMPUS PROJECT STILL AFLOAT; STATE AUTHORITY COULD ISSUE REVENUE BONDS

Southeast Missouri State University might ask a state authority to issue revenue bonds for the River Campus project.

Such a move would eliminate the need to resubmit a bond issue to Cape Girardeau voters in April.

It could allow the university to move ahead with its efforts to lobby for state funding to pay half the cost of the $35.6 million project, said Don Dickerson, president of the university's Board of Regents.

The possible funding move is expected to be discussed at a public forum Monday night on the future of the River Campus project.

The meeting, scheduled by the Cape Girardeau City Council, will begin at 6 o'clock in the Osage Community Centre.

Both university and city officials said the council and the regents could agree to the funding plan next month.

The council has a regularly scheduled meeting on Dec. 7, and the regents are slated to meet Dec. 11.

The university wants to develop old St. Vincent's Seminary in Cape Girardeau into a visual and performing arts school. A bond proposal failed in the Nov. 3 election.

Dickerson said the university's bonding attorney has suggested that the school could ask the Health and Educational Facilities Authority to issue bonds.

The bonds would be retired with money from Cape Girardeau's motel-hotel and restaurant taxes.

Cape Girardeau city voters earlier this month approved a measure that increases the city's motel-hotel tax and extends the restaurant and motel-hotel taxes to the year 2030.

But an accompanying measure that would have permitted the city to issue $8.9 million in general obligation bonds failed to garner the 57.2 percent needed for passage.

Under the latest funding plan, the university would be obligated to make up any revenue shortfall if the taxes weren't sufficient to retire revenue bonds.

Under the earlier plan, the city would have been required to make up any revenue shortfall and raise property taxes, if necessary, to do so.

"It may solve a lot of problems," Dickerson said of the idea of going through the state bonding authority.

"It would get the city off the hook for any shortfall," he said.

"On the surface, it looks like a good and viable alternative," Dickerson said.

Mayor Al Spradling III agreed. "There are some significant advantages to the city. If there is a shortage of revenue, we are not on the hook and the taxpayers are not on the hook.

"There really isn't a down side," he said.

Spradling said he believes the ballot language of the tax measure approved by voters is broad enough to allow the money to be used to retire revenue bonds that could be issued by the state authority.

City and university officials said they weren't aware of the possibility of issuing bonds through the Health and Education Facilities Authority until after the November election.

Southeast President Dr. Dale Nitzschke said, "I am quite frankly a little embarrassed that we didn't think about this beforehand."

The Health and Educational Facilities Authority was created in 1975. Headquartered in the St. Louis suburb of Chesterfield, the authority issues bonds to fund construction projects for non-profit hospitals and institutions of higher education.

The authority is directed by a seven-member board, appointed by the governor.

This calendar year alone, the authority has issued about $1.1 billion in bonds for 21 different hospital and higher-education construction projects.

"This has been our biggest year as far as dollars and transactions," said Mike Stanard, the authority's executive director.

"Interest rates are the lowest they have been in years," said Stanard, explaining the increased interest in bond-funded projects.

In past years, the authority, on average, has issued about $500 million in bonds for some 12 to 15 projects, he said.

Stanard said the primary goal is to assist private, tax-exempt institutions.

But he said the authority has issued bonds to finance projects for Central Missouri State University, Southwest Missouri State University and the University of Missouri system. In all three cases, the schools couldn't issue bonds on their own for the specific projects, Stanard said.

"In most instances, a state university or any state entity can issue its own bonds," he said.

Nitzschke said Southeast would appear to meet the criteria that would allow for issuance of revenue bonds through the state authority.

He and Dickerson said it appears financially feasible to have the authority issue the bonds.

The authority doesn't receive any state funding. Stanard said the authority and its staff are funded with revenue from the fees charged for the issuance of bonds.

Its clients are responsible for paying off the bonds. "There is no obligation whatsoever from the state to pay on the bonds," Stanard said.

Bonds can be issued in as little as two months, although some transactions can take as long as a year, he said.

Southeast officials said they want the Missouri Legislature to sign off on state funding for the River Campus project before any bonds would be issued by the authority.

If the state doesn't come through with its share of funding, the project won't go forward, Nitzschke and Dickerson said.

Nitzschke said a plan to issue bonds needs to be in place if the university is to convince the governor and lawmakers to help fund the project in the 1999 legislative session.

"If we don't, we are dead in the water," he said.