Staff Council weighs decision to pursue public-private partnership for utilities

UI Chief Financial Officer Terry Johnson presented the university’s plans to pursue a public-private partnership for its utilities to the Staff Council. The university is pursuing input from shared governance on the plans.


Katina Zentz

Staff members listen to a presentation during the Staff Council meeting at the University Town Centre on Wednesday, February 13. 2019. (Katina Zentz/The Daily Iowan)

Caleb McCullough, News Reporter

The University of Iowa Staff Council responded to the university’s proposal of entering a public-private partnership for its utility system in a meeting on Wednesday.

The UI announced Feb. 8 that it would consider partnering with a private company to maintain and operate its utility system after Gov. Kim Reynolds requested the state Board of Regents universities explore such an agreement.

UI Vice President for External Relations Pete Matthes presented the reasoning behind the plan to the council, outlining the financial issues that inspired the university’s decision to consider alternative funding.

RELATED: UI Faculty Senate addresses potential public-private partnership

“Our mission, our ‘why,’ has not changed for 172 years. It’s education; it’s research; it’s scholarship,” Matthes said. “It’s what we do. How we deliver on that why has changed.”

He spoke about the trend of declining state funding and rising tuition since the 1980s, as well as Iowa’s declining birthrate. Because of these forces, Matthes said, the university needed to look for alternative funding and attract more students to the university.

Our mission, our ‘why,’ has not changed for 172 years. It’s education; it’s research; it’s scholarship. It’s what we do. How we deliver on that why has changed.”

— UI Vice President for External Relations Pete Matthes

UI Chief Financial Officer Terry Johnson outlined the specific plan for the public-private partnership. He emphasized that the idea has not been completed yet and the university seeks input from shared-governance entities on campus.

“This is a journey and an exploration of an idea,” he said “We have not made the decision to do this.”

Staff Council members showed interest in the idea, but many were worried the partnership would have a negative effect on the UI utilities staff. Johnson stressed that the partnership was not a sale of university assets nor a way to cut jobs.

“We need the highly skilled people who currently run that plant to continue running that plant,” he said.

Johnson said the goal of the partnership would be to use the money earned to create an endowment for programs that will make the UI a “destination university.”

Matthes said university enrollment across the country is declining, but enrollment at “elite” universities, those considered among the top 50 in the country, is increasing.

To make the UI competitive in that market, Johnson said, the university has to create programs and initiatives that attract students from around the country.

“We’re right on the cusp of that,” Johnson said. “We’re not there … We need resources to make that happen.”

The other regent universities have received similar directions to find alternative funding sources, Johnson said.

Staff Council members expressed concerns about the utility rates increasing, but Johnson said rates should increase at the standard rate of inflation, as they currently do.

UI Staff Council President Michael Hesseltine said he was optimistic about the future of the process.

“I personally think it’s too early to be judging this,” he said. “I think we need to all, from a staff perspective, to sit back and let this take its journey.”

Johnson emphasized that the university would not pursue the partnership if it was not in its best interest. The university will have the opportunity to pull out of the agreement at any stage in the process before the contract is signed, he noted.

“This has to be a win-win situation,” he said. “Not just a win for the private-sector provider, it has to be a win for the University of Iowa.”

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