FAYETTEVILLE : New fee will help refurbish UA
Posted on Saturday, September 20, 2008
FAYETTEVILLE — The University of Arkansas System’s flagship campus plans to bring a detailed spending plan for student-financed capital improvement projects to trustees in November. Fayetteville campus Chancellor G. David Gearhart told the UA board of trustees Friday that his administration will continue to pursue the student “facilities fee” and can devote it fully to refurbishing existing university buildings now that it has backed away from talks to buy the nearby high school.
“The Fayetteville High School situation is really off the table,” Gearhart told the trustees, who met Friday afternoon in Fayetteville. “They did not come back to us.
“ As far as we’re concerned, that is a dead issue.” On March 28, trustees gave UA-Fayetteville the go-ahead for a mandatory $ 2 per credit hour student facilities fee as part of tuition, fees and other cost increases enacted at the system’s campuses statewide.
Then at the board’s June 6 meeting, Gearhart said the fee was part of a plan to finance a possible purchase of Fayetteville High School as well as capital projects on the university campus.
Gearhart, then-Chancellor John A. White and other Fayetteville campus officials said they planned to phase in a larger fee in five steps, increasing the original proposal $ 2 a year until it reaches $ 10 per credit hour by 2012. Part of the fee would finance a 30-year bond issue for the high school acquisition and would be charged until the bonds were retired, they said, and might need inflation adjustments in later years.
Gearhart succeeded White on July 1. On Aug. 21, the UA campus withdrew its $ 50 million offer for the 40-acre high school.
But Friday, after Trustee Sam Hilburn of North Little Rock asked Gearhart the fate of the $ 2 fee in light of the scrapped land deal, the new chancellor clarified that plans for the facilities fee were still on track.
He promised trustees that he would show them a plan for campus capital projects that could benefit from the fee proceeds and set a goal of doing so by the board’s November meeting.
Gearhart told trustees something he’s said before: The university has plenty of campus buildings long overdue for renovation or expansion.
These include three academic buildings — Vol Walker, Peabody and Ozark halls — as well as Davis Hall, a building across from the Fayetteville campus’s law school that formerly housed some law programs.
Afterward, Don Pederson, UA finance chief, said the projects that would appear in the spending plan primarily would include buildings in need of capital renewal or major, deferred maintenance upgrades.
He defined the capital renewal projects as restoring buildings at a cost that is at or below the cost it would take to replace them with new buildings.
In other business, trustees were briefed on measures UA System officials were taking to counteract an unusually high level of “catastrophic” claims this past year on its employee health insurance plan.
The UA System campuses are self-insured, serving 15, 000 employees and as many family members, said Ann Kemp, who recently moved positions within the system to a new job, vice president of administration.
The health plan has experienced roughly $ 10 million in catastrophic claims, Kemp told trustees. The primary causes were premature births — one such case cost about $ 1. 8 million — and cancer treatments, she said.
The plan still has $ 12 million in reserves, she said, so there is time to shore it up.
Earlier this month, system chancellors and presidents were told the employer share of employees’ premiums would rise 4 percent.
Officials also are considering changing co-insurance and co-pay amounts, among other things, she said.
If those measures aren’t enough, system employees might see a premium increase on Jan. 1, Kemp said, adding that they haven’t experienced a premium increase in three years.
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