Economic doldrums may help YSU plan

By Harold Gwin

A $40 million funding list could quickly grow to $50 million or more.

YOUNGSTOWN — The economic downturn hitting the nation may mean an upturn in campus improvement projects at Youngstown State University.

The interest rates on borrowing money through the bond market have apparently dropped to the point where the YSU Board of Trustees is considering expanding the size and scope of a $40 million bond issue the university plans to borrow in December or early 2009.

The issue could go to $50 million or more.

The matter came up at a trustees’ Finance and Facilities Committee meeting, and although specific rates weren’t discussed, members of the board suggested now might be the time to consider expanding the improvement project list.

The cost of borrowing $50 million at lower rates might not be much different than the cost of borrowing $40 million before the market dropped, said Scott Schulick, trustee chairman.

The committee is expected to hear more from its financial consultants at a Nov. 20 meeting.

The trustees already have the debt service on a $40 million bond issue covered, thanks to an early-retirement incentive program that resulted in annual savings of about $2.5 million — the estimated annual cost of a $40 million bond issue six weeks ago.

Interest rates have dropped and are probably at a 40-year low now, Schulick said.

The university is actually looking at a total improvement package of $82 million but only planned to borrow $40 million. The rest is to be covered with $34 million in state capital funds, $3.4 million in philanthropic gifts, $2.8 million in internal funds and $1.2 million in federal grants.

At the top of that list is the $34.3 million Williamson College of Business Administration, with $20 million of that amount coming from the bond issue. The rest is in private donations.

Increasing the bond package can add some projects to the list.

Gene Grilli, vice president for finance and administration, presented the committee with a review of the current $40 million list along with a look at four additional projects that would boost the borrowing to just over $49 million.

Dr. David C. Sweet, YSU president, said favorable interest rates may allow the university to expand to the longer list.

Schulick asked the administration to prepare a more detailed explanation of project specifics for the committee to examine Nov. 20.

Trustee Harry Meshel said the administration should also include any other projects it might think are important. Now may be the best time to look at everything, he said.

“Let’s see it all,” he said.

“We have a $60 million version too,” Sweet quipped, drawing chuckles from the committee.

Meshel said that he personally would like to see the university’s proposed indoor athletic practice facility show up on the list to the tune of about $5 million.

gwin@vindy.com