DAILY Photo by John Godbey|
Miguel Rodriguez cleans the exterior Tuesday of Calhoun Community College's new Math and Science Building, a project unaffected by the funding freeze.
Calhoun projects on hold
Athletic complex plan hit
by freeze on one-time funds
By M.J. Ellington
DAILY Staff Writer
email@example.com · (334) 262-1104
MONTGOMERY — Calhoun Community College temporarily put the brakes on a new athletic complex field house and some maintenance projects due to a freeze in one-time funds for the two-year college system.
"Those projects are on hold until we have the money to pay for them," said Calhoun spokeswoman Janet Martin.
Calhoun's decision was similar to other two-year colleges whose one-time spending projects will wait for the funding go-ahead from Montgomery.
Calhoun, like other state colleges, finances new construction projects by issuing bonds that are repaid with student tuition and fees set up for that purpose, said Martin.
Acting Post-secondary Chancellor Renee Culverhouse froze $57 million that former Chancellor Roy Johnson awarded the colleges July 10, his last day on the job before the board removed him. The Legislature appropriated the money earlier this year to help with deferred maintenance and smaller projects that the schools delayed during lean state budget years.
But Culverhouse held up the awards so interim Chancellor Thomas Corts can review them. Corts started his job Tuesday and Culverhouse returned to her regular job as president of Gadsden State Community College.
Higher loan rates possible
The two-year system's financial vice chancellor, Debra Dahl, told state Board of Education members earlier this month that colleges with large building programs could face higher loan rates if they take on more projects before paying down debt.
Dahl did not give details about how much money the colleges got in Johnson's awards, saying the amounts may change now. Board members said they also do not have the information.
Rapidly growing Calhoun is in debt for $44 million in new construction and renovation projects. Calhoun President Marilyn Beck said the school does not plan any more long-term debt in the immediate future.
Gadsden State and at least one other college in the system with large expansion programs are in a similar position because of rapid student growth and large building projects.
The state's largest two-year college, Calhoun has new programs and more than 9,000 students.
Beck said Calhoun spends about 72 percent of its budget on salaries, a figure that is in line with other two-year system colleges that average 74 percent.
Standard and Poors, which rates bonds based on the strength or weakness of the organization selling the bonds, gives Calhoun a AAA rating, the organization's highest.
Karen Moore, who tracks bonds for S&P in New York, said Calhoun also has bond insurance to protect against funding stream problems in the future.
State board member Mary Jane Caylor, D-Huntsville, said while Calhoun owes money, its position is not unusual for a college with rapid expansion. She added that the two-year colleges need money for deferred maintenance.
"If Calhoun's share is equitable, it will be fine," Caylor said, referring to the one-time money that is on hold.
But board member Stephanie Bell, R-Montgomery, said she worries about the long-term debt of the two-year system as a whole, not just one college.
Combined, the system's colleges have bond debt of $233.5 million with an annual obligation of $24.9 million in bond payments.
Bell said the board does not have a clear picture of the long-term implications of the debt. She requested information detailing the system's total long-term debt and the schedules for paying it off. Colleges in the system finance bonds through a central bond program coordinated by the central office.
Bell also wants to know how much the colleges have in reserve to pay ongoing regular expenses in case of emergencies.
"It is just like in a family: You learn to live within your means or you have problems later," Bell said. "Just trying to maintain becomes difficult, if you don't do that. We need to know what the system faces down the road."
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