NU Secures Funding to Address Aging Facilities
Last week, the University of Nebraska sold $345 million in municipal bonds to begin renovating and replacing aging campus facilities throughout the system. The university gained $400 million to begin addressing a backlog of projects at its Lincoln, Omaha and Kearney campuses, as well as the Nebraska College of Technical Agriculture in Curtis, Neb. The estimated total cost of work to be done is about $800 million, and the sale marked the largest issuance of new bonds in the university’s history.
The issuance came after state lawmakers passed a plan (LB384) to increase university and state funding for deferred maintenance projects until 2062. The passage allows the university to take advantage of unusually low interest rates and potentially save a total of $1.5 billion across 40 years.
“We really couldn’t ask for a better opportunity, as for what interest rates are,” said Chris Kabourek, University of Nebraska vice president for business and finance. “We were pushing to get the legislation done this session so we could go to work. The whole goal was to get this deal done as quickly as we could to lock in rates.”
The funding will be applied to a prepared list of 20 projects that require “major building improvements.” At the University of Nebraska-Lincoln, the Westbrook Music Building will be demolished in favor of a $75 million replacement. The Neihardt Complex, Kimball Hall, Architecture Hall, the Pershing Military & Naval Sciences Building, and four other buildings are all slated for major renovations, and the entire campus will see improvements to HVAC, electrical, fire safety, and plumbing system improvements.
Meanwhile, at the University of Nebraska Medical Center, there are plans for a new $37.5-million building College of Allied Health Professions. The College of Nursing and Eppley Science Hall will also see significant upgrades, as will two facilities at the University of Nebraska at Omaha.
The university is also reserving about a quarter of the bond’s proceeds for “environmentally sustainable projects” like replacing HVAC systems, electronic controls, carbon-dioxide monitors, and air-filtration systems.
As part of the legislation, a monetary value of 2% of each project will be placed into a depreciation fund dedicated to funding future deferred maintenance projects. “That’s key, because then we’ll get out of this cycle of having to borrow every 10–20 years, and we can just start funding those projects internally,” Kabourek said. “It will require discipline, but it’s a high priority for the [Board of Regents] and the chancellors.”
About the Author
Matt Jones is senior editor of Spaces4Learning. He can be reached at mjones@1105media.com.