DALLAS - An engineering education center will be built at the University of Texas campus in Austin with funding from $255 million of bonds under a financial plan approved by UT System Regents Wednesday.
The University of Texas System will issue $150 million of revenue bonds for the project through its Revenue Financing System and $105 million of bonds supported by the Permanent University Fund. The revenue bonds are secured by a system-wide pledge of all available revenue.
The remainder of the funding will include $5 million from UT-Austin reserves and at least $50 million in philanthropic contributions. University officials said they have raised $30 million so far and have at least another $35 million in oral commitments.
If more than $50 million is raised from private sources, the amount of revenue bonds will be reduced.
UT Regents had approved $30 million of PUF bonds for the project in August 2010, and another $75 million of the bonds in August 2011.
The UT System's credit is rated triple-A by all three major rating agencies.
The university had hoped to build the $310 million engineering education and research center with help from $95 million of tuition revenue bonds.
However, a bill authorizing up to $2.7 billion of tuition bonds for projects at campuses across the state failed to win approval from the 2013 Legislature.
The Legislature has not approved tuition bonds for state schools since 2006's authorization for $1.9 billion of revenue debt.
Bill Powers, president of UT-Austin, said the school will meet its fundraising goal of $105 million. The bonds approved by the regents will allow construction to get under way before all the promised money comes in, he said.
"What this does allow us to do is get going," Powers said. "It's a very needed building."
Power said it was "amazing" that the engineering school had functioned in its cramped, outdated spaces.
"This new center will propel UT-Austin to the highest tier of engineering education and research and will serve our state well into the future," Power said.
UT Regents had approved $30 million of PUF bonds for the project in August 2010, and another $75 million in August 2011.
"The additional funding is meant to make up for the shortfall due to no tuition revenue bond availability," said UT System spokeswoman Jenny LaCoste-Caputo of the revenue debt. "UT will still be required to meet their fundraising goal, but would get more time to do so."
The eight-story center on the Austin campus is expected to be completed by late 2017 or early 2018.
The building will replace the 50-year-old engineering science building and allow the Cockrell School of Engineering to add 1,000 more students to bring the undergraduate enrollment to 6,000.
The new space will also allow an increase in the number of doctoral students to 480 from the current 300. It will also provide the space and infrastructure to support the electrical and computer engineering department, which is now the engineering school's largest major with more than 2,000 students enrolled.