University officials still negotiating after missed deadline

Jessica White

Today is supposed to be the approval deadline for Kent State’s proposal of $210 million in bonds, but the university still hasn’t gotten the ‘go ahead.’

The Build America Bonds, which expire Jan. 1, would help fund a campus-wide renovation plan. University officials introduced the proposal to the Ohio Board of Regents more than a year ago, and said they hoped for approval by Nov. 8 to leave enough time for the bonds to get on the market and picked up by investors.

Rob Evans, a Board of Regents spokesman, said Kent State and board officials will continue to meet regardless of the missed deadline.

“We shouldn’t end up costing the university any extra money,” Evans said. “We see the (expiration) deadline coming, and I don’t see any reason why we would miss it.”

If Chancellor Eric Fingerhut and the board don’t approve the bonds by the Jan. 1 expiration date, it will cost Kent State another $57 million, university officials said. If the university doesn’t sell the bonds, it will have to take out higher-interest loans to pay for construction.

Fingerhut’s biggest problem with the proposal was the method to pay off the bonds: student fees.

Fees of $7 per credit hour would begin in 2012 and gradually increase to $24-per-credit-hour by 2016, so some students paying for the renovations might not even get to see them.

University officials said because the construction is phased over five years, all students would see some renovations. And if Kent State can’t promise an immediate income to investors, it will be difficult to sell the bonds.

Evans said the final funding method for the bonds is still undecided, but financial teams from both parties met last week and will continue negotiations this week.

“We’re still working on a compromise, and I think both parties understand the basic elements of what the other wants,” Evans said. “Now it’s just a matter of getting the legal language outlined.”

If the proposal isn’t approved by January, Kent State officials may run into more road bumps because Fingerhut — who was appointed by Gov. Ted Strickland and holds his position until June 2012 — will soon be answering to new governor-elect John Kasich.

Evans said the switch could be challenging because Fingerhut has never done this transition. But he said support for higher education comes from “both sides of the isle,” so he doesn’t see much reason for concern.

“Every significant reform that we’ve passed on higher education in Ohio — even during Governor Strickland’s term — had to go through both parties at some point,” Evans said. “In the end, everybody has invested interest in the state being economically competitive. And higher education is the key to that.”

He said the Board of Regents has a strong foundation to continue work with either party, and he looks forward to doing so.

“We’re excited to start those conversations with the new governor-elect’s administration and to see what their vision of higher education is,” Evans said. “And we’ll work from there.”

Kasich spokesman Rob Nichols said Kasich also looks forward to the experience.

“Kasich has worked in a bipartisan manner his entire career, and he will continue to do so upon assuming office,” Nichols wrote in an e-mail statement.

Although some university officials voiced concern over Kasich’s lack of a platform on higher education during his campaign, President Lester Lefton also said he looks forward to working with Ohio’s future governor.

“We’re eager to find out more about his plans for the University System of Ohio and the next state budget,” he said in an e-mail statement.

You can contact Jessica White at [email protected].

Editor’s note: This article has been changed from its original version to make a clarification.