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Times Record News (Wichita Falls, Texas)
Midwestern State University is ready for some football - namely a football stadium.
"We have started to try to identify potential donors for a stadium," MSU President Suzanne Shipley said at the university's board of regents meeting Thursday. "It's right there in the forefront of our planning."
But MSU also is trying to keep an eye on the amount of debt the university has taken on as of late, considering its many construction projects, not all of which will affect the school's bond rating, or the grade given by companies such as Moody's and Fitch to indicate an entity's credit quality and financial strength.
The bottom line, according to MSU's Marilyn Fowlé, vice president of administration and finance, is, "We can't take much more (debt) on without our overall budget growing."
"We took on a substantial amount of debt when we built Legacy," regent Jeff Gregg said, referring to the university's newest and largest dorm, the five-story, 500-bed, $35.25 million Legacy Hall, which opened in August.
MSU also is about to complete a $5.5 million mass communication addition to the Fain Fine Arts Center - the project is about 90 percent complete. It also will launch the construction of a new health sciences and human services construction project that is expected to cost about $40 million, $29.5 million of which will go to construction costs.
Shipley said that, to its benefit, MSU's various construction endeavors are funded in different ways.
"For me, the important news is this falls in different buckets," she said. "... The great thing about our debt is it's shared ... and many universities are not in that realm right now."
Some projects, for example, have been funded by tuition revenue bonds, which are backed by the state.
The project that has been more of a concern for Shipley, she said, is the mass communication addition: "We built a building with our own resources," she said of MSU using its own funds for the new mass comm wing.
Gregg reiterated what he was feeling from administrators: "We've maxed out on debt."
Fowlé said financial rating agencies look at not only the amount of debt a university carries but how projects are funded and whether project funding is supported by outside entities, such as the state, or are fully funded by the university.
Fowlé said MSU's bond rating with Fitch is AA, which is not quite the highest rating of AAA.
"It (the AA rating) is high quality and very low credit risk," she said, and added, "We're doing well."
Fitch commented that the outlook is stable for MSU, its enrollment is stable in a competitive environment, and it has adequate financial cushion to absorb modest operating deficits. Fitch also said that although MSU is carrying a high debt burden, a large portion of it is covered by the state.
Fitch said that it is "expecting operations to improve materially following operating deficits; failure would likely result in a downgrade."
Fowlé said bond rating company Moody was "a little worried that our debt burden was growing ... Their concern is we're not growing very fast."
She said the message from these companies is that MSU should hold back on its debt a little more until the university grows. Moody's indicated, "We could have downgraded you, but because the economy of Texas is so strong, we're going to keep you at 'stable' right now."
Gregg worried that MSU's Dallas-Fort Worth expansion - MSU now has a presence in Flower Mound - might mean even more debt for the university.
"But it's a lease," Shipley said, indicating that the leased Flower Mound space should not affect MSU's debt burden the same way as purchasing property would.
Shipley also said in her president's report to the board on Friday that MSU is hoping for some state appropriations to help in the Flower Mound expansion.
Follow Times Record News senior editor/reporter Lana Sweeten-Shults on Twitter @LanaSweeten-Shul
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