Topeka — With the amount of bond debt at Kansas public universities increasing, the Kansas Board of Regents is working on tightening policies when it assesses the financing of capital improvement projects.
“The regents has a debt policy today; it’s pretty ambiguous,” said Regents Vice Chairman Kenny Wilk.
“Sitting in the board seat, it doesn’t really give you any parameters to kind of let you know if you are in a good solid zone, are you moving into a cautious zone, or a red zone. I think what the board is really looking for is a kind of a green light, yellow light, red light,” he said.
The six universities’ revenue bond debt has increased 44 percent since 2009, from $540.6 million to $777.9 million, an increase of $237.3 million. KU’s has increased from $288.8 million to $356.8 million, an increase of $68 million, or 23 percent.
Higher education officials say the debt load has increased because the state has essentially stopped appropriating funds to construct buildings on college campuses.
And while the universities have increased their private donations, Kansas State University President Kirk Schulz said that alone can’t meet their needs.
“We’re caught between a rock and a hard place. What happens when we have to build a $200 million science building?” he said.
Regent member Tim Emert said the increasing reliance on debt concerns him.
“If something goes belly up, the students are going to pay for it. It’s not going to be the Legislature. It’s pretty apparent, the Legislature will approve of anything they like and don’t have to pay for,” he said.
For now, all the regents universities are safely in the area of what is considered good debt to operating revenue ratio, according to Moody’s Investors Service.
“I think we’re actually in good shape right now, so this is the time to be working on it,” Wilk said.