Central Michigan University’s Board of Trustees approved the issuance of general revenue bonds during its meeting today. The bonds will finance a portion of construction costs for the $95 million Biosciences Building and the design and construction of an $8 million lacrosse/soccer field and student recreation facility.
The bonds will generate $45 million. That revenue, along with $30 million from the State of Michigan for the Biosciences Building and $28 million from internal construction reserves and gifts, will complete financing for both projects.
Work began on the Biosciences Building this summer. The largest construction project in the university’s history, it will be fully operational with classes and research beginning January 2017.
Trustees previously approved the addition of women’s lacrosse in accordance with Title IX regulations.
Plans call for a lighted synthetic turf field to be used by the lacrosse and soccer teams as well as CMU club teams. An adjacent building would house locker rooms, restrooms, concessions, coaching offices and a training room. Trustees will be asked in December to approve moving forward with construction and design.
Barrie Wilkes, vice president of finance and administrative services, told trustees that CMU will maintain its Aa3 credit rating from Moody’s and an A+ from Standard and Poor’s with a stable outlook even with the additional debt from the bonds.
Visits earlier this month from Moody’s and Standard and Poor’s went well, Wilkes said. Central’s conservative budgeting philosophy, Global Campus operations and cash on hand that insulates the university from unexpected revenue declines or expenses are allowing CMU to maintain its positive rating while other U.S. universities are being downgraded.
In addition, Wilkes told trustees this is an ideal time to issue bonds because borrowing rates are near historic lows. To maximize savings, CMU also will refinance bonds from 2005, resulting in an approximate 7 percent savings and a lower annual debt service payment than the university currently makes. Industry standards indicate a 3 percent savings makes refinancing worth doing.
Trustees also received an independent audit of the university’s finances with a “clean, unqualified opinion” — the highest level of assurance — from Plante Moran. CMU has an unrestricted net position of $273 million — much of it designated for the colleges. However, that will be reduced by about $100 million next summer when the university records an unfunded pension obligation for the Michigan Public School Employees Retirement System.
In other action, trustees:
- Heard a report from Katherine Lasher, Title IX coordinator and director of the Office of Civil Rights and Institutional Equity. Lasher updated trustees on new legislation and CMU’s programs and efforts to address sexual assault and harassment cases. Her report is
- Approved leasing additional space in the Mount Pleasant Commerce Center for the CMU Bookstore to operate an embroidery business. CMU leases space in the facility for the Bookstore’s Global Campus Distribution Center. The new lease adds 5,000 square feet for $122,000 total through May 31, 2018; and
- Heard from President Ross about enrollment growth, recognition of staff members who lead CMU’s sustainability efforts and progress made on initiatives in the university’s strategic plan. The board approved priorities, initiatives and corresponding metrics for this academic year. The president’s report to the board can be