The state Board of Regents would be authorized to sell $100 million in bonds to rebuild flood-damaged UI buildings under a new Iowa Legislature proposal.
The bill was unveiled and subsequently passed out of its Senate subcommittee and the chamber’s Appropriations Committee on Tuesday.
Area legislators lauded the plan’s merits, arguing bonding is the best way to raise additional money for rebuilding efforts.
“With the unmet needs, I think the $100 million will help the university get back up and running,” said Rep. Dave Jacoby, D-Coralville.
Sen. Bob Dvorsky, D-Coralville, also praised the bill.
“I think it’s a good idea to do it this way considering the circumstances,” said Dvorsky, who drafted the bill after UI Senior Vice President of Finance Doug True put the plan together.
The UI sustained more than $700 million in flood damage last summer.
The Federal Emergency Management Agency is supplying the majority of funding needed to rebuild damaged buildings on campus, and the university has raised more than $100 million of its own mitigation funding through private fundraising, among other sources. And the UI’s insurance has covered about $80 million of the price tag.
Still, additional money is needed to match FEMA funding — and that’s where the bonding proposal comes in.
If passed, the regents would have the authority to issue bonds — essentially borrowing money that would need to be paid back with interest — and plug the funding raised into restoring or reconstructing the IMU, Hancher Auditorium, and other affected buildings.
With the state facing record budget cuts, supporters such as Jacoby paint the proposal as the only way to rebuild the UI in a timely fashion. While he acknowledged the downsides of borrowing, the Democrat maintained the necessity of the plan.
“It is the only way to rebuild now,” Jacoby said about the proposal, which is projected to ultimately cost more than $200 million after interest. “The decision basically has to be made if we want to continue these programs.”
Regent Robert Downer agreed with Jacoby’s assessment.
“I think it’s as good a way that I know of for the funds to be generated to rebuild the campus,” he said. “The only alternative to it, it seems to me, is to essentially shrink the university physically [and] programmatically.”
Dvorsky was confident about the bill’s prospects in the Senate, and Jacoby predicted the proposal will garner approval in the House as well.
Still, Jacoby expects lawmakers on both sides of the aisle to raise “strong questions” about the bonding proposal, including the state’s ability to repay the bonds, the need for such bonds, and whether that need is immediate.
“I think it will be a spirited discussion in the House, again with both parties,” he said. “I certainly hope it passes. I think it will.”