University of Wyoming officials are hoping legislators will revisit the 2019 legislation on dormitories construction to give UW a better deal on a potential $49 million loan from the state’s rainy day fund.
UW has not yet issued bonds for the upcoming construction of new dorms, but university officials are planning to finance the dorms almost entirely with bond debt, and the trustees have discussed the possibility of incurring at least $200 million in new bond debt.
That debt would then be repaid in time with students’ room-and-board.
To raise the university’s bond capacity, legislators passed a law in 2019 that offers a $34 million loan from the state’s rainy day fund to allow UW to defease existing bond debt and another $15 million loan for UW to start construction.
Under the current legislation, whatever amount of that $49 million potential loan UW were to use, the university would have to repay the state at an “annual adjusted interest rate of one‑quarter of 0.25% higher than the return received by the state in the immediately preceding fiscal year on the portion of the legislative stabilization reserve account that is not invested in equities.”
However, UW Trustee John McKinley said Friday that it would be “too risky” for UW to take a loan from the state under those terms.
At a meeting of the UW Housing Task Force, university officials suggested legislators revisit the 2019 law to give UW an interest rate that’s equitable with the kinds of loans that community colleges can get from the state.
Using the Permanent Mineral Trust Fund, community colleges are able to complete construction projects with loan rates of about 2 percent.
“Our initial analysis says that if a rate was structured as the community college rate is structured, it would be financially beneficial to the institution and worthwhile to engage in that defeasement,” said David Jewell, UW vice president for budgeting and fiscal planning.
Getting that change could be a tough sell in the Senate.
In 2019, the first dorms law only passed the Senate on a 16-12 vote, and the mere existence of the $34 million loan earned strong opposition from some heavy-hitting Republicans, including Joint Appropriations Committee chairman Sen. Eli Bebout, R-Riverton.
“When we go home, how are we going to explain to our constituents that we’re going to allow $34 million of defeasance for one particular spot in our state?” Bebout said near the end of the 2019 session. “If you say ’yes’ one time, how to do say ‘no’ to other people.”
To prepare for the construction of new dorms along the west side of 15th Street, UW plans to demolish Wyoming Hall in 2020 and move employees from that building to Hill Hall, an abandoned dorm on Grand Avenue.
The university has already moved some of the ROTC programs’ storage to Hill Hall, and campus architect Matt Newman said the university will begin moving offices from Wyoming Hall to Hill Hall on Dec. 16.
Wyoming Hall won’t be fully vacated until February, when UW’s human resources offices will be moved.
As part of Wyoming Hall demolition, the university will need to move a number of utility lines that run underneath the 68-year-old building.
UW received proposals from companies last week for the utility infrastructure relocation, and Newman said UW will select an engineering consultant this week.
UW is currently preparing to construct a new energy plant on campus. That plant should be completed in time to accommodate the new energy needs created by the new dorms along 15th Street.
At the board of trustees’ November meeting, the trustees approved a guaranteed maximum price for the energy plant of $29 million with GE Johnson Construction of Wyoming.
The demolition of Wyoming Hall and construction of new dorms on that site will eliminate the parking lots south of the building on the west side of 15th Street.
To mitigate the loss of parking, UW is converting 135 “R” parking spots near Corbett Pool to “A” parking spots to accommodate the employees who will be working in Hill Hall, Newman said.
More parking should also become available in fall 2020 at the parking lot located at the northwest corner of Lewis and 15th streets. That lot is currently unavailable to employees because UW uses it for its buses. However, UW plans to move its fleet operations to south 15th Street near Interstate 80 in 2020.
“That will accommodate another 100 (“A” permit) spots in that lot,” Newman said.
Newman said Friday that a land surveyor is nearing completion of UW’s parking lot at the northwest corner of 11th Street and Grand Avenue, where the university is now planning to construct a new parking garage for about 400 vehicles. The current parking lot currently holds about 120 vehicles.
A drill rig was also at the site of the planned parking garage last week to “begin geotechnical investigations for the foundations for the structure,” Newman said.
UW also needs to get the city of Laramie vacate an alley right-of-way that runs through the current parking lot.
On Thursday, UW officials interviewed three design firms for the parking garage project and Newman said the board of trustees should receive a recommendation for a design firm at their December meeting.