DALLAS — The University of Arkansas Board of Trustees gave preliminary approval to $141 million of revenue bonds Friday that will finance improvements to the main campus in Fayetteville.
The proposal is the second-largest bond package ever sought by a UA system school. The largest was a $150 million issuance approved in 2004 for a new hospital and upgrades at the UA Medical Sciences Center in Little Rock.
A final bond package will be presented to trustees on April 1 and to the Arkansas Higher Education Coordinating Board on April 15.
“This is a resolution of intent to issue,” said UA spokesman Steve Voorhies. “We will work up the exact specifications of the bond issue over the next month and bring the final detailed list to the trustees.”
The UA system’s $1 billion of outstanding facilities revenue debt is rated Aa2 by Moody’s Investors Service. The total indebtedness includes $448.5 million issued for the Fayetteville campus.
UA-Fayetteville’s total debt in fiscal 2010 was 16.1% of net tuition and fees, well below the 25% limit set by the Arkansas Department for Higher Education.
The projects are part of a multi-year, $218 million effort to catch up with years of deferred maintenance at the Fayetteville campus, along with renovation of existing facilities to new uses.
The system issued $51.9 million of revenue bonds for the upgrade effort in December 2009.
Chancellor G. David Gearhart said the upgrades and additions are needed to serve a growing enrollment. The Fayetteville campus had almost 21,500 students at the beginning of the fall 2010 term, but expects to top 23,000 by fall 2011.
The bonds would be supported by a variety of revenue streams, including student facilities fees, dining and dorm revenues, and athletic department revenues. The university will also rely on at least $40 million in private donations for the projects.
The proposal includes $25 million for a new football operations center, $22.8 million for renovations to an existing facility that will accommodate the school of architecture, $18.4 million for an addition to the geosciences facility, and $23.3 million for dormitory renovations.
The football operations facility will be financed with private donations, said associate athletic director Kevin Trainor. UA already has received pledges totaling $15.2 million for the facility, which is expected to cost a total of $35 million, Trainor said.
“The $25 million in bonds will allow us to get the project under way and completed in a reasonable period,” Trainor said. “A pledge of $1 million, for example, doesn’t come in one check. It is spread out over several years, in most cases.”
Bonds issued for the football operations center will be supported by private donations and athletic revenues, he said, not through state appropriations or student fees.
“We are a self-sustaining organization,” Trainor said. “We don’t get money from the university, and we are one of the few universities without a student fee for athletic facilities.”
The football operations center will be located south of Donald W. Reynolds Razorback Stadium. It will house the football offices now located in the athletic department building, as well as training rooms, locker rooms, study areas, a recruit reception area, and a Razorback football museum. Work could begin on the football facility as early as fall 2011, Trainor said. Completion is expected in late 2013.
“The bond plan will allow us to move forward while continuing to collect the pledged donations,” he said.
