Tuition may soon back $100 million in flood loans

BY EMILY MELVOLD | JUNE 09, 2009 7:30 AM

The typical in-state UI student pays $3,412 a semester in tuition. While that money normally fund such campus services as professors’ salaries and building maintenance, it soon may be used as the collateral for $100 million in flood-recovery debt.

Gov. Chet Culver signed bills for hundreds of millions of dollars to be borrowed for flood recovery in Iowa. If the state can’t pay that money back, the UI will use students’ tuition to pay off its part of the loan.

While officials are sure that students’ tuition will be used as collateral for the allotted $100 million, the state Board of Regents have yet to decide what exactly that will mean for students — whether tuition will increase or remain unaffected.

Officials from the Iowa Finance Authority said that because the bonds have not been issued yet, financing details haven’t all been decided.

“The regents will be the issuer of the bonds and be able to address questions relating to the finances,” said Phil Roeder of Culver’s office.

The $100 million under the jurisdiction of the regents is part of a larger project called I-JOBS with an overall pricetag of $830 million. Culver signed the final bills for the I-JOBS program on May 26.

A board of 11 members — six appointed by the governor and five state government officials — are working together to allocate $118.5 million of the total sum.

Culver appointed public members Jeff Pomeranz, West Des Moines; Joni Dittmer, Eldridge; Kate Gronstal, Council Bluffs; Pat Baird, Cedar Rapids; Toi Sullivan, Sioux City; and Willard “Sandy” Boyd, Iowa City.

In addition to the six public members, the board consists of State Treasurer Mike Fitzgerald and representatives of the Iowa Finance Authority, Department of Economic Development, Iowa Workforce Development, and the Rebuild Iowa Office.

The board met for the first time at the Statehouse on June 3 to develop the guidelines for applying for grants. They will be in charge of reviewing and awarding grants to applicants for flood recovery project funding, so local government or nonprofits from the Iowa City area may be eligible to receive this funding.

“We are awarding money to city and county governments and public organizations,” said Boyd, a law professor at the UI.

Five equally weighted criteria were established to determine which projects will be awarded money: Job creation, financial feasibility, sustainability and energy efficiency, benefits for disaster recovery, and readiness to proceed. The board would like the project to begin within a year, or they will not likely choose to support it.

Other requirements for applicants include demonstrated local support for the proposed project and proof of substantial local, regional, or statewide economic impact.

Noncompetitive grants — an additional $46.5 million — will also be overseen by the board, which will mostly be put toward rebuilding and jobs in the Cedar Rapids and Linn County area.

A tentative timeline for the board was established with July 1 as the date applications are available, and first-round applications are due Aug. 3.

The board has said they are trying to work quickly, because the state will simply be holding onto millions of borrowed dollars instead of putting them to good use. Meanwhile, Iowans could also be losing jobs.

“We want to issue the money quickly and efficiently to start making a difference,” Boyd said.

Correction: In the June 9 article “Tuition may back bonds” the DI incorrectly reported the average tuition paid by UI students. Students pay on average $3,412 per semester. The DI regrets the error.

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