UNH faces tough questions over $20M 'investment' in sports complex
CONCORD — Gov. Maggie Hassan and top Republican lawmakers are questioning the University of New Hampshire's plan to use $20 million in cash reserves to fund a new $25 million athletic complex at the current Cowell football stadium.
UNH announced late last week that if it can raise $5 million in contributions, it plans to borrow against its reserve for the balance of the cost, calling it a "strategic investment."
But Senate President Charles Morse of Salem called that move "news to me" and Hassan questioned whether this is the best use of limited resources. Both questioned current tuition costs.
Harsher comment came from House Republican Leader Gene Chandler of Bartlett who was "pretty amazed" that UNH has "more money in its slush fund than the state as a whole has in its rainy day fund." Lawmakers are debating whether to put $15 million into the so-called Rainy Day Fund out of a surplus of $72 million from the last biennium.
"It boggles my mind that we would be spending money on something like that when we have so many other needs at the university system," said Chandler.
UNH spokesman Erika Mantz said in an email, "The university has reserves, similar to a savings account, that it borrows against for strategic investments, such as this one. Using internal borrowing means that we can make good use of our savings to benefit our students and other constituents, as well as ensures the savings are replenished. We do not expect the project to impact tuition."
Hassan's spokesman on Monday said she believes UNH "should continue to focus on making tuition more affordable and on ensuring that their programs are preparing students for success in the 21st century economy, and she questions whether UNH's intention to put $25 million toward a new sports facility is the best use of limited resources for addressing these goals."
Hassan spokesman Marc Goldberg said the governor has expressed her concerns to school officials and has asked for more information. The governor sits on the board of trustees but it wasn't clear whether she attended last Thursday's session, where the plan was detailed.
House Speaker Terrie Norelli said she has questions about whether the plan is the best way to attract students to the state university.
"We worked very hard last year to make in-state tuition affordable for Granite State students. I believe we were very clear in establishing that as a priority for the university system," Norelli said in a statement released by her office. "We look forward to an explanation about how this proposal fits into achieving that priority."
Tuition increase worries
In the fiscal 2014-2015 budget, the university system received $153 million. It also received $8 million for projects in the capital budget over the two years. As a result of the state increase, trustees voted in June to freeze tuition.
Senate President Morse said he is sure the university's total cash reserves are "well north" of $20 million.
"To have reserves for a rainy day is one thing, but to have reserves for a football stadium is a different thing," he said.
"My major concern with the university system is, a reason the public is taking on personal debt is that tuitions are going up. They need to be concerned about that."
Morse said every business should have reserves, "but for them to pledge it for this purpose, I think is a mistake."
He said the university should raise money privately for the full amount or seek legislative approval though the capital budget.
"I'm sure they'd have real problems justifying that this would be a priority in the capital budget," he said.
"I'd be real concerned that we're not watching the bigger picture, which is to make sure we're keeping tuition down," Morse said.
Morse said he is "all for athletics and would be a big cheerleader to make sure they move forward."
But he said he believes the money should be raise through donations.
Morse conceded that lawmakers have little control over the university's approach.
"I don't know their business model," said Morse. "And that's half the problem with the way government works in New Hampshire. With them being off separate, we don't play in that ballpark.
"But as a legislator, my major concern and first question is: Are you going to be able to hold tuition in the future? That's the most important thing, and that will be the first question," he said.
Chandler added, "It's kind of appalling to me that this is what they are doing in light of increased tuition costs and what it costs a kid in this state to go to the university system. People need to realize how much the football program really costs the state of New Hampshire."
750 students at games
UNH said it attracts about 750 students to Cowell Stadium, which seats about 6,500 but would grow to 10,000 under the new plan. UNH said a new stadium would attract more students to games and to the university as a whole.
The university has 14,761 students, 12,565 of whom are undergraduates.
Chandler said he does not believe a new stadium will attract more students to the university.
"It may bring more scholarship football players to the university, who get a free ride, at the expense of the kids of New Hampshire having to pay a higher tuition," he said.
Chandler said state lawmakers many years ago erred by giving the university system a substantial level of autonomy over its budget and finances.
"In hindsight, it was one of the biggest mistakes we ever made," he said. "I don't think we can go back."
Chandler said there is nothing lawmakers can do about the current situation, but when the university system approaches the Legislature next year for its next budget, "I think it's problematic for them in the long term. I really do think it's going to hurt them down the road."
Plans for a new athletic complex were reviewed by the university system trustees on Jan. 30; the university will make a more detailed request at its April meeting, according to the UNH statement.