[Vision2020] faculty staff payraises at UI

[Rodna Hansen]

Two words.  Jerry Wallace.
----- Original Message ----- 
From: "Ron Force" <rforce@moscow.com>
To: <vision2020@moscow.com>
Sent: Friday, April 02, 2004 2:14 PM
Subject: RE: [Vision2020] faculty staff payraises at UI


> Here's what I remember off the top of my head-- I don't have time to fully
> research it right now so please excuse me if I'm off a million here or
> there.  The UI Foundation paid for the land acquisition and development
> costs-- about $28 million.  When the project fell through due to the
> recession and the decline of commercial real estate in Boise, the UI had
to
> turn to the state building authority to bond the project.  The bonds were
> enough to pay for the first building, but not the development costs, so
the
> Foundation is on the hook for the $28 million.  Because of cash-flow
> problems, members of the Hoover administration tapped the UI's cash
reserves
> for an operating loan to the Foundation.  I believe that money has been
> repaid by the Foundation, or will be soon.
>
> No dedicated endowment funds were lost from the Foundation, so all
dedicated
> scholarships, etc. are still being paid.  However, the Foundation donated
> $1.5 million/yr. from the unrestricted funds to the University for
operating
> costs.  That's now being used to pay the interest on the $28 million loan
> that the Foundation assumed to cover the development costs.
>
> The Water Center in Boise will cost about $1 million in lease costs each
> year, plus $636,500 to operate. The lease costs for UI current office
space
> in Boise is around $600K, so there's another million we have to come up
> with. The problem is that the Water Center wasn't originally designed to
> hold all UI programs, so some of them may have to stay in current office
> space until enough money can be found to finish the new space. Normally,
the
> state increases the budget to cover Occupancy Costs, that is, the
increased
> costs for utilities and maintenance. The Legislature declined to
appropriate
> any funds for any new buildings, including all the new facilities being
> built with bonds (including the Teaching-Learning Center).  This will cost
> the UI another $ 1 million.
>
> Drawing down the cash reserves lost $633,000 in interest earnings. In
2001,
> the Kempthorne administration thought it would be foolish not to invest
the
> State's Land Grant Endowment in the Stock Market and got we citizens to
> endorse a constitutional amendment to allow it. This year, the loss to the
> UI's Land Grant Endowment Income is $600K.
>
> So, the Boise problem has directly cost the UI about $4 million.  The
> Foundation is on the hook for $28 million. The real problem is that the
> University's reserves were systematically drawn down in the 90's to
maintain
> and promote all sorts of good things, so there's no cushion for the
> shortfall in funds from the legislature. The UI will get about $2 million
in
> new Maintenacne of Current Operations funds from the state appropriation,
> but has the following new and continuing obligations:
>
> 2% raises; $1.6 million
> Fringe Benefit Increases: $1.3 million
> Prior Years' Obligations (gap between spending and income): $4 million
>
> There are the big things that are not optional. The rest of the millions
are
> in things like building maintenance, scholarships, and a bunch of other
> programs that make a long list.
>
> *************************************************************************
> Ron Force  Moscow ID USA
> rforce@moscow.com
> **************************************************************************
>
>
> A month has gone by since I last asked this question, so I'll ask it
> again: Where did the many millions of dollars go that the UI lost on its
> Boise real estate speculation?
>
> Don Coombs
>
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