As the recession leaves the Colorado state budget increasingly less room for construction projects on college campuses, the state’s institutions of higher learning are coming up with more creative ways to fund these projects.
The state budget outlook is grim indeed; estimates for next year’s shortfall range from $1 to $1.7 billion. Federal stimulus dollars, which saved state funding for higher education operating expenses from the guillotine last year, expire in 2011, so higher education will return to the chopping block. A new law requires colleges and universities to provide the state with plans for how they would absorb a 50% funding cut.
No new higher education construction projects are slated for state funding next year, the third year of such a freeze.
Yet for our state’s colleges and universities, the ability to develop on-campus facilities is imperative, both to accommodate growing enrollment and to have adequate facilities to ensure student success.
Many Colorado institutions are forging ahead with construction projects by taking advantage of the low-interest bond market and using student fees, tuition increases and grants. The more established universities are able to use endowment dollars and corporate and alumni donations.
Simultaneously, these institutions are tightening their belts. Metropolitan State College of Denver, for instance, has eliminated positions, raised tuition and delayed its faculty Pay for Performance program, among other measures.
Metro State occupies a unique niche in the state’s system of higher education. Required by statute to be accessible to all citizens and to focus its efforts on teaching rather than research, its tuition is the lowest in the state. Metro State is also increasingly popular, demonstrating remarkable enrollment growth (now at its highest ever with more than 23,000 students). The current economy only drives more enrollment growth, as more people head back to college to retool their skills in an increasingly competitive workplace.
As the leader in educating undergraduate Coloradans, Metro State students account for more than 50% of the 40,000+ and growing Auraria Campus, which it shares with the University of Colorado Denver and the Community College of Denver. Already there is a shortfall of one million square feet of space on campus—even with modular trailers brought in to accommodate space shortages.
In an institution that was lean to begin with, Metro State’s challenge is to ensure that its cost-cutting does not come at the expense of its commitment to providing qualified students with access to a high-quality education and the support they need to complete their college degrees.
But ensuring student success requires—in addition to appropriate programming and staff—facilities. And facilities cost money.
Facing this conundrum, Metro State has turned to what academics are known for: innovation.
Rather than use the federal stimulus money to backfill business as usual, Metro State is using it to retool and reposition ourselves for the future. We made difficult decisions on how to absorb the budget cuts, including the elimination of 100 positions. Then, we put the stimulus money into several new ventures designed to leave the institution better off in the long run. These include a retirement-incentive program where longtime faculty members create a project that the institution can use once the faculty member retires, the hiring of new grant writers to help faculty members obtain more outside support from foundations and the federal government, and a Rightsizing with Technology initiative to increase efficiency with new automated systems for things like scheduling student meetings with counselors.
We put the question of funding for a new Student Success Building with an estimated price tag of $52 million before our students, who generously voted to levy a student fee to pay for it. We are proud and grateful to our students for taking it upon themselves to finance a new campus building. However, we are also acutely aware that our students, many of whom are working adults and first-generation students from low-income backgrounds, are not in a position to shoulder the burden of financing campus construction indefinitely, particularly as their tuition continues to rise.
In June we secured historically low rates on Build America Bond-Recovery Zone Economic Development Bonds that will be used for the Student Success Building, as well as a backfill project plan ($10 million) to create new classrooms and offices. This represents the first time that Metro State has issued bonds for its own construction project.
In pursuit of the kind of private/public partnership financing that is also new to Metro State, we are in discussions with Sage Hospitality and Mortenson Construction hotel developers for the development and financing of a new 150-room for-profit hotel to include a Hospitality Learning Center for our Hospitality Program, estimated at $45 million. Incorporating classrooms, specialty learning labs and faculty offices, the HLC will provide real-world training opportunities for students and will be a learning lab for both the hotel operator and faculty. In addition, the operating agreement with Sage will generate revenue that the college will be reinvested back into academic programs and scholarships.
And, we are exploring numerous other types of partnerships for other construction, including ways to leverage private-sector dollars to support our academic mission and construct campus improvements not constrained by statutes or state funding. This is all part of the Auraria Master Plan, which creates individual neighborhoods for all three institutions housed on the campus.
Campus facilities are integral to Colorado’s future. If construction is inhibited, our ability to educate our citizens—developing a skilled workforce and maintaining global competitiveness— will be thwarted.
Luckily for the future of campus construction—and for Colorado’s future—thinking creatively is what colleges and universities do best.