University turmoil hurts bond rating

Friday, Oct. 15, 2004 | 9:32 a.m.

RENO -- Unsettled conditions in the University and Community College System of Nevada are preventing the system from saving money, a university official said Thursday.

Buster Neel, vice chancellor of finance, told a meeting of the Board of Regents' audit committee that representatives of Moody's and Standard & Poor's visited Nevada as part of the preparation for the issuance of $10 million in bonds for construction.

Neel said he was hoping that Moody's would upgrade its A1 rating of the system to AA. A better rating would make it easier to sell the bonds and would help the system get a lower interest rate on the bonds.

But he said the representatives of Moody's were concerned about whether the state would provide enough money for the university system in 2005 and even into 2007. There also was "concern" about the turnover in the chancellor's office, Neel said.

And "there was concern about the governance" of the system by an elected board of regents. Nevada is one of only a few where an elected board oversees the system, he said.

Interim Chancellor Jim Rogers has been restructuring the chancellor's office, changing the legal staff assignments and hiring some new people.

There is also a bill requested for the 2005 Legislature to make the board an appointed body. A similar bill was introduced in the 2003 session but was not approved.

Regent Doug Hill of Sparks said turmoil in the system hurts the bond rating.

Neel agreed that the system was "not as settled as they (Moody's) would like it to be."

Standard & Poor's kept the system at an AA rating. "They felt we have a manageable debt level."

Neel said the system purchased bond insurance for $42,000 to raise the rating to AAA, Standard & Poor's highest rating.

Hill asked if spending the $42,000 resulted in saving that much or more in issuing the bonds at a higher grade. Neel said the experts would not estimate if it would result in savings. Also on Thursday, the regents' budget and finance committee heard a report about parking at the Reno and Las Vegas campuses of the universities.

Michael Sauer, UNLV's associate vice president for administration, told the committee the campus master plan calls for adding two more floors on the Cottage Grove parking garage and five new garages at a cost of between $250 million and $300 million.

Fees at UNLV range from $532 for reserved spaces; $152 for faculty and staff and $79 for students. Faculty members have the option of buying a less-expensive student pass, Sauer said. In addition there is a free 289-space parking lot that is about a 10-minute walk from the main part of the campus.

Sauer said UNLV has a policy of increasing fees up to 10 percent a year to provide enough money to pay for adequate parking for the faculty and students.

In other regents action Thursday, one of the board's committees approved a proposed athletic training research laboratory at UNLV to provide an educational and research setting for investigation of the treatment and rehabilitation of sports-related injuries.

The committee also approved a center for mathematics and science education in the College of Sciences at UNLV.