Standard & Poor’s last week said Iowa State University’s credit would not suffer due to the devastating floods that hit the Midwest in June even as the university has reported preliminary costs of $232 million associated with flood-related repairs.
The university saw about 14 of its buildings on its campus in Ames seriously affected by the flooding, including utility tunnels nearest to the Iowa River which overtook its banks. The damaged dormitories are being repaired and should be ready for the fall semester. As other buildings are repaired, such as the Arts Complex, temporary space is being provided. The university did cancel some summer classes in the arts and music programs.
While the costs are not yet final, the university expects to fund them through a mix of insurance proceeds, federal reimbursements, possible state assistance, and internal funds.
“At this time, university officials estimate that the net cost to the university could range from $25 million to $60 million. Given the tentative nature of these estimates, and the university’s overall financial resources and fundraising capacity, we expect these costs will be manageable,” analysts wrote.
The university expects enrollment to be similar to last year. The extensive University Hospital was not damaged, analysts wrote. The university’s unlimited student fee bonds are rated AA, the same as its hospital revenue bonds. Its dormitory revenue bonds are rated A-plus, its parking revenue bonds A and athletic facilities revenue bonds are AA-minus.
ISU is one of three public universities in Iowa and is the state’s flagship academic, research, and health care institution. The fall 2007 enrollment of 30,409 was up 2.2% from fall 2005. Outstanding debt is about $745 million, including $72.6 million of hospital revenue bonds.
