One untrue claim that circulated on the unofficial “FAMU
Alumni” Facebook group was that Mangum wanted to replace Palmetto North, but
Interim President Larry Robinson threw out those plans and just decided to keep
that complex on an indefinite basis.
Robinson has said that he wants to tear down and replace
Palmetto North. University officials told WJXT-4 in Jacksonville that the
interim administration aims “to replace the 45-year-old dorms with new
facilities as a long-term solution.”
Back in 2016, Mangum said she planned to seek money to build the
“Living-Learning Community” through the U.S. Department of Education HBCU
Capital Finance Program. A FAMU application for this program will be up against those by many
other HBCUs that have much more dire capital financing needs than Palmetto
North.
FAMU and the other public universities in Florida mainly
rely on bonds that the state sells to private companies to build on-campus
housing. But FAMU needs to repair its dormitory bond rating in order to get a
more competitive bond rate.
Back on October 27, 2016, a press release by Moody’s
Investors Service announced the company’s decision to downgrade to “Baa1”
FAMU’s $38 million Series 2012A Dormitory Revenue Bonds issued by the Division
of Bond Finance on behalf of the Florida Board of Governors. It reported that
the “outlook is negative.”
Mangum began her presidency on April 1, 2014. Eight months
later, on December 1, 2014, Moody’s gave FAMU an “A3” rating, which is one
level higher than the current rating of “Baa1.”
“The downgrade is based on a material deterioration of the
university’s fiscal position with prolonged enrollment declines and limited
revenue raising ability,” the 2016 press release stated. “The housing system
has not met projected revenue growth and debt service coverage from pledged
revenues remains thin.”
Moody’s had warned back in 2014 that continued monetary
losses from enrollment declines could negatively affect FAMU’s rating. But
despite those warnings from Moody’s, Mangum didn’t stop the enrollment decline.
That led FAMU to lose another $9M+ in tuition and fees in 2015-2016.
Robinson has gotten enrollment up this year, which will put
FAMU on the path to a better dormitory bond rating. Moody’s said that “materially improved
university-wide cash flow performance leading to sustained growth in flexible
reserves” and “increased enrollment with consistently strengthened debt service
coverage for the housing bonds” could improve FAMU’s rating.