Student fee discussed for UTC construction

Student fee discussed for UTC construction

December 22nd, 2011 by Perla Trevizo in News

Students at UTC may see a fee increase to help pay for new buildings under a capital projects plan that includes a life sciences building.

Under the plan recently approved by the Tennessee Higher Education Commission, schools will have to match part of the cost of new buildings.

For instance, the University of Tennessee at Chattanooga's life sciences building, which will include laboratories, has an estimated cost of $59.5 million. If the state approves THEC's recommendation, the school would have to come up with $14.8 million.

The recommendation is now headed to Gov. Bill Haslam, who will decide whether to put all or part of it in the budget plan he expects to give the Legislature in January.

CAPITAL PROJECTS: MAINTENANCE

Chattanooga State Community College

  • 2 underground piping corrections: $590,000 each

Cleveland State Community College

  • HVAC update: $710,000

University of Tennessee at Chattanooga

  • Campus safety and security improvements: $3.7 million
  • Grote Hall roof replacement: $1.2 million
  • Central Energy Plant chiller No. 4 installation and Oak Street distribution system extension: $4 million

CAPITAL PROJECTS: CONSTRUCTION (2013-2017)

UTC

  • Life sciences laboratory: $59.5 million, including $44.625 million from state funds
  • Academic classroom building renovation: $31.5 million, including $23.625 million in state funds
  • Health science laboratory: $49.1 million, with $36.825 million from the state

Source: Tennessee Higher Education Commission

Online: To read the Tennessee Higher Education Commission's capital projects recommendation, visit timesfreepress.com

Richard Brown, vice chancellor of finance and operations at UTC, said he likes the matching approach but knows it will be challenging.

"Our approach will be much similar to what UTK has done," he said. "We will probably implement a specialized facilities fee over the next three years to help [and] seek fundraising support from the local community."

Brown said the life sciences building will allow the school to enroll more students in rapidly growing fields such as nursing and occupational therapy.

The number of UTC students in fields that would use the life sciences building has grown from 1,586 in 2007 to 2,747 in 2011, data show.

On Tuesday, Haslam told reporters in Nashville he wants to put more money in capital projects for higher education.

"I do think it's something that, due to the way the economy was for several years, we weren't able to put much money there," he said.

The five-year capital projects plan includes an academic classroom and a health sciences laboratory for UTC. Many of the other projects for the region's institutions have more to do with maintenance.

Half the square footage in the state's colleges and universities was built before 1970, said Russ Deaton, chief fiscal officer for THEC.

Chattanooga State

James Catanzaro, president of Chattanooga State Community College, said the college just built a major health science center and acquired a new building from Olan Mills.

He said most needs are minor, such as fixing underground pipes in two places, roof replacements and electrical updates on the 50-year-old campus.

"You must upgrade the infrastructure because if you don't [do that] in a timely manner, the cost would be tremendous in the future," he said.

Cleveland State Community College needs $580,000 in elevator repairs and a $180,000 sewer-line replacement.

The question remains how to pay for the $290 million in capital projects for 2012-13 and close to $2 billion under THEC's proposed five-year plan.

The University of Tennessee and Tennessee Board of Regents systems have discussed a $1.5 billion bond issue.

However, Haslam said in an October UT system meeting that "ultimately it will be a decision of the Legislature to decide how much debt we are comfortable with and take priorities from both systems."

State Sen. Andy Berke, D-Chattanooga, said the matching portion of the plan is an innovative way to fund projects.

"It is a significant amount of money, but this is an investment in our economy's future," he said. The plan is important to increase educational attainment and workforce development under the Complete College Tennessee Act, he said.

The Legislature will explore all options but "traditionally we've been a low-debt state. We've paid our bills as they come due," Berke said.

State Sen. Bo Watson, R-Hixson, said Tennessee has one of the best debt ratings in the country and won't take on debt that puts its Triple-A bond rating at risk.

"I understand there are significant capital needs in our higher education system; on the other hand, we are coming out of one of the worst recessions," he said.

State revenue is up about 4 percent, Watson said, but that's not enough to free cash for capital projects.

"But we realize there are some capital projects we are going to figure out how to fund," he said.

Haslam is expected to release his budget in January and Berke hopes lawmakers can pass a budget in May.