Tuesday, April 17, 2018

Nicole Washington’s proposal could hurt athletics, student housing construction in SUS

A proposal introduced by Nicole Washington, a member of the Florida Constitution Revision Committee, could hurt athletics and student housing facility construction in the State University System of Florida (SUS).

A staff analysis of the proposal Washington put forward states that it would change the constitution to mandate “a favorable vote of 9 of the 13 members of a BOT to propose a new fee or fee increase. The fee is also subject to BOG approval, and 12 of the 17 BOG members would have to approve the fee increase in order for it to be imposed.”

If the full Florida Constitution Revision committee approves the proposal, it would appear on the Florida ballot. Voters would need to support it by 60 percent for it to pass.

The staff analysis calls the fiscal impact of the proposal “indeterminate.” But the change could make it harder for public universities to make adjustments in fees in order to finance athletics and student housing building projects.

The Florida Legislature does not fund student housing construction and only rarely provides support for new athletics facilities. SUS schools mainly fund those projects by getting private bonds that are then repaid with student fees and other monetary sources that come from outside their legislative appropriations.

If just a small number of members of either a Board of Trustees (BOT) or the Florida Board of Governors (BOG) can stop a public university from getting fee a increase that's needed for a new student housing or athletics facility, then that might be enough to stop a construction project from happening.

That type of situation could also be bad news for a university’s bond credit rating with agencies like Moody’s Investors Service.

Back in 2016, Moody’s downgraded FAMU’s Dormitory Revenue Bonds rating down one level to “Baa1” with a “negative” outlook. It stated that: “The downgrade is based on a material deterioration of the university’s fiscal position with prolonged enrollment declines and limited revenue raising ability.”

A small number of BOT or BOG members blocking fee increases could create problems with “limited revenue raising ability” at many SUS schools.

Washington, who is a member of the FAMU BOT, defended former President Elmira Mangum despite the enrollment decline that would be a big part of the downgrade decision by Moody’s. She voted to give Mangum a contract extension in August 2016, but the majority of the BOT members voted against that motion. Moody’s later announced the downgrade of FAMU’s bond rating in October.

Moody’s changed its outlook for FAMU from “negative” in 2016 based on the Mangum years to “stable” in 2017 under President Larry Robinson following the Fall 2017 enrollment increase that Robinson brought to the university.

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