Valparaiso University is asking for the city's help in borrowing money. The university is asking the city to issue up to $117 million in tax-exempt revenue bonds that the university can't legally issue on its own — although the university expects the final amount will end up being closer to $55 million.
Around $15 million of that would be used for improvements to academic buildings, along with more "routine" capital investment needs, like new roofs and IT infrastructure, according to Chief Financial Officer Mark Volpatti. "[We're] really looking at how can we support renovations and more infrastructure within our sciences, and that seems to be where we're going — and perhaps even the health professions," Volpatti told the city council Monday.
However, the bulk of the bond proceeds would be used to restructure existing debt.
There would be no impact on Valparaiso taxpayers, and the university alone would be responsible for repaying the debt, according to attorney David Nie with Ice Miller. "[We're] really looking at how can we support renovations and more infrastructure within our sciences, and that seems to be where we're going -- and perhaps even the health professions," Volpatti told the city council Monday.
He said it will also include more "routine" capital investment needs, like new roofs and IT infrastructure.
However, the bulk of the bond proceeds would be used to restructure existing debt.
There would be no impact on Valparaiso taxpayers, and the university alone would be responsible for repaying the debt, according to attorney David Nie with Ice Miller. "The bond is issued by the city, and the proceeds are loaned by the city directly to Valparaiso [University], so you're just a pass-through," Nie told council members.
Members of the public will have a chance to weigh in on the proposal during an economic development commission meeting on May 28. It would then go back to the council for final approval during a special meeting. The university hopes to close on the bond sale by the end of June.
Some council members questioned why the university didn't request a bond before it went through the long and controversial process of selling some of its art collection. Volpatti said the university had felt the artwork was a great asset but one that wasn't necessarily contributing to the campus's operations. He said the sale would bring in about $12 million, which the university plans to use for freshman dorm renovations, including new furniture and air conditioning.
"People will say that the number-one reason that students don't come to Valparaiso University is because of the housing," Volpatti said. "So, how can we fix that, because all the other stuff is really good for us?"
Volpatti said Valparaiso University is looking to determine the proper size for the school, considering enrollment projections, with the goal of bringing expenses in line with revenues in the next few years.
