Bond logic: Regents explain why they made a good decision

By John Tlapek, Brad Bedell and Gail Rosmarin

Much has been said and written recently about Southeast Missouri State University's River Campus project.

House Speaker Rod Jetton has stated, "The River Campus is a worthwhile project that could help the university and Cape Girardeau."

The undersigned, being members of the board of regents currently and in 2003, would like to take this opportunity to state that the board believed the project to be vital to the university and to explain why the board voted unanimously to issue the bonds to fund the amount previously appropriated by the state of Missouri.

We believe the facts below clearly indicate that the board's decision was fiscally responsible and in the best interest of the university, its students, the city of Cape Girardeau, the region and the state of Missouri.

The university's board of regents waited to proceed with the River Campus project until the General Assembly sent clear signals that it would eventually fund the project.

Those signals were forthcoming, including the prior appropriation (fiscal year 2000-2001) and re-appropriation (fiscal year 2002-2003) of $4.6 million from the state, the prior appropriation (fiscal year 2001) and reappropriation (fiscal year 2002-2003) of $11,950,000 from the state and a $1,000 place-holding appropriation inserted in the capital budget (House Bill 1119, fiscal year 2004-2005) at the request of then-Senate president pro tem Peter Kinder.

All were approved by the House, the Senate and the governor. The $1,000 appropriation was a type that is routinely used in Jefferson City as a signal that the legislature intends to fund a capital project in the future.

Representatives of the university and its financing team met with Linda Luebbering, then the budget director for the state, and discussed the proposed financing on Nov. 12, 2002. In addition, board president Donald Dickerson and regent Sandra Moore, along with Southeast president Ken Dobbins, met with the governor to explain the proposed financing plan. No objections were made to the proposed method of funding the River Campus project. In fact, it was discussed that this method of funding the project would enable the state to delay payment of the then-existing appropriations until the state's financial position had improved.

Clearly, we regents had every indication that the state intended to act as a member of the financial partnership between the city of Cape Girardeau and the university foundation to make the River Campus a reality.

However, we were also informed by President Dobbins that student fees might need to be increased if state funding were ultimately unavailable.

(Estimates indicate now that the increase would be approximately $6 per credit hour, which is about a 4 percent increase).

When the decision to proceed was made, the board acted wisely to protect substantial investments by the city of Cape Girardeau ($8.9 million), the federal government ($7.1 million), and numerous private donors ($11.1 million), most of which were already in place for the project as of September 2003.

Our decision was the most prudent one we could have made under the difficult circumstances. Had the board of regents not voted to borrow the money in September 2003 and award bids for the project when it did, the value of the city, state, federal and private funds already in place for the project would have continued to decline due to inflation.

In fact, the increase in construction costs due to hurricanes Katrina and Rita would have added some $8 million to $10 million to the cost, according to estimates from experts in the construction industry. Those increases would have either made the project impossible or forced architectural changes that would render the River Campus much less effective for its intended purposes.

From the outset, the university was open and honest about the bond-financing arrangements that were made in order to proceed with the project.

These arrangements were all approved by bond counsel after their customary strict scrutiny, and included payments by the university from any legally available source, including any combination of state appropriations, student fees or private donations.

It is unfortunate that the River Campus project has been excluded from the Lewis and Clark Discovery Initiative, which promises millions of dollars for higher education capital-improvement projects.

Now is the time for all of us to work together to secure the funding for this vital project, to protect the interests of 10,000 Southeast Missouri State University students and to join the board of regents in celebrating an outcome which will be positive for all concerned.

John Tlapek of Cape Girardeau is president, Brad Bedell of Sikeston, Mo., is vice president and Gail Rosmarin of Poplar Bluff, Mo., is a member of the Southeast Missouri State University Board of Regents.