Some Kansas lawmakers are raising objections to Kansas University's plans to finance its $325 million Central District Development Plan, but they stopped short of putting the entire project on hold Tuesday.
Instead, the Joint Committee on State Building Construction gave tentative approval to the plan, but told KU officials to be ready to answer more questions after the full Legislature convenes its 2016 session in January.
"I just think some of these projects that are wrapped up into this package are circumventing the normal appropriations process," said Rep. Mark Hutton, R-Wichita. "I have serious concerns about the amount of dollars being spent here with no legislative oversight, and then eventually, at the end of the rainbow, the state is on the hook for that debt."
Hutton raised those concerns after KU officials outlined their plans for financing several projects in the district.
Jim Modig, university architect at KU, said projects in the district include an integrated science building to replace the aging Mallott Hall; revamping the Burge Union; construction of a central utility plant and improvements to the existing plant; new parking facilities; new apartment buildings; a residence hall and dining facility; and other infrastructure improvements.
To finance those, KU plans to use what it calls "public-private partnerships," or "P-3" in legislative parlance. That involves setting up independent nonprofit corporations that would issue the bonds to pay for construction. KU, then, would lease the buildings back from the corporation, and those lease payments would be used to make the bond payments.
Hutton, who works in the construction industry as a general contractor, said similar financing plans have been used in the past on revenue-generating buildings such as residence halls, but never before for classroom space or basic infrastructure such as a power plant.
Theresa Gordzica, KU's chief business and financial planning officer, said that structure would shield the university and the state from any liability for the bonds.
"The bonds will be an obligation of that not-for-profit corporation using the revenue of the lease to pay that back," she said. "Those bonds will state clearly in there that it's not an obligation of the state of Kansas and that the bondholders can't come after the state of Kansas if there's any problem with the repayment of those bonds."
But Hutton and others on the committee were reluctant to accept that at face value. First, they argued that the source of the money to repay the bonds would be student tuition and fees — revenues that Hutton said he considers "state funds" that should be subject to legislative oversight through the appropriations process.
In addition, though, Hutton said that in the event of a default, he considered it highly unlikely that KU would allow buildings in financial default to remain on its campus and that, eventually, either students would be asked to pay higher tuition and fees to pay off the debt, or the state would be asked to bail out the projects.
Committee Chairman Rep. Steve Brunk, R-Wichita, said he shared those concerns, as did Sen. Forrest Knox, R-Altoona.
"Certainly the state of Kansas would be on the hook," Knox said. "In all practicality, seeing what I've seen in the last 10 years, we would not let catastrophe to happen. We would step in, and we would finance this."
At first, Hutton offered a motion directing KU to put its Central District Development Plan on hold until other legislative committees have a chance to review the projects and ask questions about the financing.
But Sen. Laura Kelly, D-Topeka, offered a substitute motion, essentially approving KU's plans for the time being, with the understanding that KU will be expected to answer additional questions before House and Senate budget committees after the 2016 session convenes.
Kelly's substitute motion passed on a voice vote.
Kansas University's tougher admission standards are inching closer to reality.
On Monday, state and KU officials briefed the House-Senate Committee on Rules and Regulations about the proposed standards, and the Kansas Board of Regents will probably put the finishing touches on them next month.
The proposed standards are "designed to encourage student achievement and student success," said Sara Rosen, senior vice provost for academic affairs at KU. "The current standards do not reflect what it takes to succeed at the University of Kansas," she said.
Currently, admission criteria are the same for all six regents universities. A Kansas high school graduate can be admitted if he or she meets one of these:
— Has an ACT score of at least 21 or SAT score of at least 980.
— Ranks in the top one-third of the high school class.
— Has a 2.0 grade point average on a 4.0 scale in the Kansas Qualified Precollege Admissions curriculum.
Under the proposed standards, to be automatically admitted to KU, graduating high school students would have to complete the pre-college curriculum along with one of these:
— A minimum 3.0 GPA and an ACT score of at least 24 or 1090 SAT.
— A minimum 3.25 GPA and an ACT score of 21 or 980 SAT.
Students would also have to apply by Feb. 1 prior to their freshman year at KU to be considered for automatic application.
Students who don't meet the criteria will have their applications reviewed by a committee that will look at numerous considerations, including whether the applying student would be a first generation college student, or is the child or grandchild of KU graduates, and has the potential to succeed academically. If given final approval by the regents next month, the standards would take effect for the entering freshman class in fall 2016. Rosen said the new standards would "result in more students successfully earning degrees from the University of Kansas."
Matt Melvin, KU's associate vice provost for recruitment and enrollment, said the goal is not to deny access but to get students enrolled who are better-prepared for the rigors of KU. He said the school is not so much interested in recruiting freshmen, but "recruiting graduates-to-be."