In a unanimous decision, New Mexico’s Higher Education Department voted to approve Northern New Mexico College’s application to the New Mexico Finance Authority to issue bonds, which would provide funding for the dormitories on the Española campus.
Despite the approval on June 11 for financing the construction project, Committee Board members had a couple questions.
The college estimated 90 percent occupancy based on the recommendation of the Capital Projects Committee. Many other colleges are not running at that occupancy, but if the Northern’s estimates are correct, it could buck that trend.
“The timeline that you put in here is pretty aggressive,” Capital Projects Committee Member Debbie Romero said. “In reality, I don’t think that you are going to have your dorms built by August of next year and so what is the alternative? To build a building of this size, that type of building, so you’re not going to have the revenues come August. So what is your plan if it slips six months or so?”
Northern’s Financial Advisor Paul Cassidy said, “What we’re proposing on the financing plan is that we’re going to fund interest on the debt through December of 2015, so even if it doesn’t open in January, we have cash available to pay the debt service up through December of 2015.”
One place this funding could come from is the reserve fund. The bond lawyer for Northern, Peter Franklin, informed the Board members that a reserve fund needed to be established in case the college cannot pay the interest from its operating budget.
During the meeting, Northern President Nancy Barceló defended the college’s need to build dormitory facilities on the campus. She said Northern still recruits within a 40-mile radius, despite being a college that serves all of Rio Arriba County — a county that extends to Colorado.
Barceló wants to extend that recruiting radius and the dormitories will help in that effort, since it can attract students who may not already be living in the area.
“We have a student, for example, this year, brought along from Doña Ana County, and that tells me that there is a lot of interest in Northern, but because of the housing situation in Española, specifically, it’s just not available there in terms of apartments that you might find in other communities,” Barceló said. “Again, the importance of the residence hall is critical to our enrollment and our recruiters who just came off the road. All have indicated that this is a prevailing question that they continue to be fielded with.”
Kevin Powers, treasurer of Northern’s Board of Regents, was also in attendance and pointed to a specific public safety incident that occurred within the town to emphasize the point.
“You may have seen on the news recently there was a shooting in Española,” Powers said. “I think that underscores our concerns about housing our students in the community. We’re concerned about safety. We believe we need to get them on the campus and have a better opportunity to keep them safe.”
This was the second application Northern’s Board of Regents sent to the Higher Education Department.
The Regents submitted an initial application the Committee reviewed and sent back with recommendations.
“There were four recommendations that you made to us that we have addressed,” Barceló said. “One, of course, was certainly related to cost, bringing the cost down. Also, looking at a traditional-style dorm in terms of reconfiguring what we had originally presented, as well as securing a bond rating and looking into our infrastructure.”
There are still a few hurdles that need to be cleared before construction can begin. The Board of Regents has to petition the New Mexico Finance Authority to issue bonds to finance the project.
There will be a hearing later this month where the Finance Authority will hear the College’s situation and vote on the measure.
If the College gets approval, it will then have to appear before the Capital Projects Committee once more to discuss the actual construction project.
The application will then be sent to the New Mexico Board of Finance for final approval.