University budget neutral despite $60 million construction project

By Seth Weber and By Seth Weber

Although the University’s $60 million construction project is mostly being paid through debt, it does not stray from its usual budget.

The focus for the University is to stay “budget neutral,” said Sheri Stoll, chief financial officer. As old debt is paid off, the University is able to take out more debt to finance projects, she said.

University Spokesperson David Kielmeyer said the debt used to finance some buildings such as the Union may have been paid off by this time, which allows the University to take out debt again to finance other projects.

“As we have existing debt that’s getting paid off new debt’s coming on,” Stoll said. “And that’s why timing matters so much to us, because to the greatest extent possible, our goal is to make this budget neutral.”

The University’s debt is in the form of bonds bought by other businesses or organizations. The Bank of New York acts as a trustee for these bonds, Stoll said, whose job it is to sell those bonds.

“They say ‘here is our money’ and we pay them interest and in exchange they give us our money,” Stoll said. “If [the trustee is not] successful in selling those bonds, what’s left over they’re going to have to buy and hold themselves. So they’re going to be incredibly motivated to sell those bonds.”

Kielmeyer said this is the way all large organizations finance projects. Compared to the University’s peers, the debt taken out is “conservative,” he said. Much of that is contributed to the University’s size and needs, Stoll said.

Stoll said the money taken out will allow the University to improve student life in the long run.

“These dollars are going to be what’s going to enable us to renovate our historic buildings, enabling us to renovate the rec center,” she said. “I think they’re critically important projects.”

The construction and renovation will give students a more effective learning environment, Stoll said, and “dramatically improve and upgrade academics.”

Nicole Neely, vice president of the University Student Government, said she understands why some students may be put off by the $60 million dollar price tag, but said the construction is important.

“I understand where they’re coming from but at the same time, [the University is] really are doing everything they can for the students,” she said. “It’s very necessary. We need these upgrades to further students’ education.”

She said USG agrees with the administration that renovations need to happen and is following the process every step of the way.