State Senator Joe Bolkcom is accusing the state's Board of Regents of "moving at breakneck speed" and leaving Iowans in the dark about the finer details of a public-private partnership at the University of Iowa.
Over the last year, University of Iowa leaders have urged their state board of directors to award a private company a 50-year contract to run campus utilities in exchange for a hefty endowment. By investing the endowment, the UI would reap around $15 million each year over the span of five decades.
Officials at the Board of Regents and the University of Iowa have declined to release the names of companies vying for the decades-long partnership or these companies' proposed endowment sums.
Next Tuesday, the Iowa Board of Regents will publicly release the name of the top bidder for the contract. University of Iowa officials recommend the board vote on the contract that same day.
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This January 27, 2014 file photo shows strong winds pushing steam to the southwest from the UI Power Plant. (Photo: Benjamin Roberts/Iowa City Press-Citizen)
Without sharing the top bidder's proposed endowment contribution, University of Iowa President Bruce Harreld told the Board of Regents this week the endowment would need to be invested in a way that generates $3 billion over 50 years.
Bolkcom is skeptical of the ability of this investment to meet that return, calling the contract "exotic and possibly risky financing with international investors’ money."
"The plan relies on the performance of the markets to succeed," Bolcom said. "If for some reason the University can’t pay back the money, Iowa taxpayers will."
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Regents asked Harreld during an informational session Tuesday whether taxpayers would ever be responsible for the fixed fee the UI would owe the private partner annually. This fee would start at $35 million and increase by 1.5% in subsequent years.
"Oh, let me take the last [question]," Harreld said over the webcam. "Answer is definitively no. It's the university [that is responsible]."
UI officials see the partnership as a means of generating additional funding for the university and even finding a partner that can help them achieve sustainability goals.
Harreld told the Board of Regents the contract will include proper penalties if the partner fails to deliver on its responsibilities or fails to meet the UI's goal of becoming coal-free by 2025. He said that the partnership is designed such that the UI pays for the cost of fuel, staff and capital improvements so that the private partner is not motivated by profits to make cuts in these areas.
More: University of Iowa pitches public-private agreement ahead of a Tuesday vote
Bolkcom said Iowans deserve a "far more transparent process," including a public comment portion to express their views on the final details of the partnership.
"Why have Iowans been left in the dark?" he posited in the statement.
On campus, Faculty Senate officers feel the process for considering private partnerships has been transparent, according to the organization's president. One faculty member will sit on a three-person nonprofit board, which will hire a financial firm to invest the endowment and establish the annual net proceeds the UI receives from the investment.
In a statement to the Press-Citizen, Faculty Senate President Sandra Daack-Hirsch said administrators met with Faculty Senate in February and have subsequently held six open information sessions since that meeting. She adds professors Tom Rietz and Joe Yockey served in an advisory role to UI administrators, "providing countless hours of review and critical analysis."
However, Daack-Hirsch said the process of allocating the endowment funds needs more discussion.
"The Faculty Senate is particularly interested in the proposed P3 resource allocation process," Daack-Hirsch said. "I think what’s been proposed is a good place to start a conversation, but I think the process needs to be vetted, challenged, and revised until campus stakeholders are confident in the process."
Daack-Hirsch said the partnership shows the administration's push for a stable funding source, something Harreld has long stressed. At board meetings, Harreld has broadly lamented state lawmakers' "generational disinvestment" in higher education.
On the subject of inadequate state funding, Bolkcom and UI's president seem at least to share some common ground.
"This elaborate, 50-year creative borrowing scheme is the result of the failure over the last decade by the Iowa Legislature and Governor Reynolds to adequately fund our public universities," writes Bolkcom.
https://www.press-citizen.com/story...versity-iowas-utility-partnership/4356967002/
Over the last year, University of Iowa leaders have urged their state board of directors to award a private company a 50-year contract to run campus utilities in exchange for a hefty endowment. By investing the endowment, the UI would reap around $15 million each year over the span of five decades.
Officials at the Board of Regents and the University of Iowa have declined to release the names of companies vying for the decades-long partnership or these companies' proposed endowment sums.
Next Tuesday, the Iowa Board of Regents will publicly release the name of the top bidder for the contract. University of Iowa officials recommend the board vote on the contract that same day.
This January 27, 2014 file photo shows strong winds pushing steam to the southwest from the UI Power Plant. (Photo: Benjamin Roberts/Iowa City Press-Citizen)
Without sharing the top bidder's proposed endowment contribution, University of Iowa President Bruce Harreld told the Board of Regents this week the endowment would need to be invested in a way that generates $3 billion over 50 years.
Bolkcom is skeptical of the ability of this investment to meet that return, calling the contract "exotic and possibly risky financing with international investors’ money."
"The plan relies on the performance of the markets to succeed," Bolcom said. "If for some reason the University can’t pay back the money, Iowa taxpayers will."
ADVERTISING
Regents asked Harreld during an informational session Tuesday whether taxpayers would ever be responsible for the fixed fee the UI would owe the private partner annually. This fee would start at $35 million and increase by 1.5% in subsequent years.
"Oh, let me take the last [question]," Harreld said over the webcam. "Answer is definitively no. It's the university [that is responsible]."
UI officials see the partnership as a means of generating additional funding for the university and even finding a partner that can help them achieve sustainability goals.
Harreld told the Board of Regents the contract will include proper penalties if the partner fails to deliver on its responsibilities or fails to meet the UI's goal of becoming coal-free by 2025. He said that the partnership is designed such that the UI pays for the cost of fuel, staff and capital improvements so that the private partner is not motivated by profits to make cuts in these areas.
More: University of Iowa pitches public-private agreement ahead of a Tuesday vote
Bolkcom said Iowans deserve a "far more transparent process," including a public comment portion to express their views on the final details of the partnership.
"Why have Iowans been left in the dark?" he posited in the statement.
On campus, Faculty Senate officers feel the process for considering private partnerships has been transparent, according to the organization's president. One faculty member will sit on a three-person nonprofit board, which will hire a financial firm to invest the endowment and establish the annual net proceeds the UI receives from the investment.
In a statement to the Press-Citizen, Faculty Senate President Sandra Daack-Hirsch said administrators met with Faculty Senate in February and have subsequently held six open information sessions since that meeting. She adds professors Tom Rietz and Joe Yockey served in an advisory role to UI administrators, "providing countless hours of review and critical analysis."
However, Daack-Hirsch said the process of allocating the endowment funds needs more discussion.
"The Faculty Senate is particularly interested in the proposed P3 resource allocation process," Daack-Hirsch said. "I think what’s been proposed is a good place to start a conversation, but I think the process needs to be vetted, challenged, and revised until campus stakeholders are confident in the process."
Daack-Hirsch said the partnership shows the administration's push for a stable funding source, something Harreld has long stressed. At board meetings, Harreld has broadly lamented state lawmakers' "generational disinvestment" in higher education.
On the subject of inadequate state funding, Bolkcom and UI's president seem at least to share some common ground.
"This elaborate, 50-year creative borrowing scheme is the result of the failure over the last decade by the Iowa Legislature and Governor Reynolds to adequately fund our public universities," writes Bolkcom.
https://www.press-citizen.com/story...versity-iowas-utility-partnership/4356967002/
