N.J. officials: Bonds for colleges are on track

Rowan University president Ali A. Houshmand (right) and trustees chair Linda Rohrer (seated) applaud the deal, in which State Sen. Stephen M. Sweeney (left) was a key figure.
Rowan University president Ali A. Houshmand (right) and trustees chair Linda Rohrer (seated) applaud the deal, in which State Sen. Stephen M. Sweeney (left) was a key figure. (ELIZABETH ROBERTSON / Staff Photographer   )
Posted: February 04, 2014

TRENTONMore than a year after voters approved $750 million in funding for New Jersey colleges, some state Democrats are questioning the timing of how the bonds are released, while state officials say the money will still come through as expected.

Voters approved the funding in a referendum in fall 2012, a measure to support construction and infrastructure projects such as building new classrooms or overhauling WiFi networks. The state issued $100 million in bonds in May. No new bonds have been issued from the $750 million initiative since.

"The people of this state voted thinking that all that money was going on the street at once, and the reason why we wanted to go all at once was actually to help the economy because $750 million . . . will actually get a lot of things moving quickly," state Senate President Stephen Sweeney (D., Gloucester) said in an interview last week, adding that "$100 million at a clip isn't doing anything. And you're delaying the process and the progress that we wanted to make."

Colleges and universities have moved forward with their projects, drawing from their own coffers. The initial $100 million, when it is delivered to the colleges, should cover their short-term costs, said Alan Guenther, a spokesman for the secretary of higher education.

"The grant administration process is proceeding. Based on estimated construction cash-flow requirements and draw schedules provided by the colleges, it is expected that the initial $100 million issued will cover all immediate and near-term project costs," Guenther said in a statement Friday. "In the meantime, colleges that wish to proceed with construction are free to move forward with the assurance that allowable expenses will be reimbursed."

The question of the bond funding timeline was raised Thursday, when Rochelle Hendricks, the state secretary of higher education, was questioned during a scheduled appearance before the state Senate Higher Education Committee.

Paul A. Sarlo, the deputy Senate majority leader, asked Hendricks for a "quick synopsis" of the bill. "We were doing this as a jolt to the economy, to put the money out on the street and put people to work on the construction, and then convert them into permanent jobs . . . and other opportunities in higher ed," said Sarlo (D., Bergen). "Is the first offering only a hundred million, or is there going to be more than that?"

Hendricks said that the process was moving quickly and that her office had been working with the colleges, the Treasury Department, and bond attorneys.

"I'm probably going to come back to that, but I really don't want to get into a lot of details, but I will say that we've been working very closely with all the key stakeholders," Hendricks said, citing the various groups. "But that also requires that we do it in a way that we're trying to minimize some of what could be negative impact on the colleges by having too much administrative trivia.

"But I want to assure you that we're moving at, I think, a very rapid clip to do this, but to do it . . . in a way that protects that investment," she said.

After the $750 million was approved, approximately $540 million in additional state funding was added, for a total pot of $1.3 billion. Colleges and universities in March submitted wish lists of "shovel-ready" projects.

In advance of the fall election, Gov. Christie and other officials went on a tour of the state, appearing at ceremonial groundbreakings at schools. In October, Christie was joined by Sweeney at a ceremony at Rowan University.

Rowan was the state's second-largest recipient of the money. Its two largest projects, for business and engineering buildings, are both funded from the $750 million pot. The business school building is slated to receive more than $40 million; the engineering expansion will receive nearly $46 million.

Those projects are proceeding using other school money in the meantime, a Rowan spokesman said.

"With anything like this, we knew that we're not waiting. We're not waiting . . . until there's a transfer account . . . or a check to start something. We have to move forward, we have to plan," Rowan spokesman Joe Cardona said.

"We have confidence that the state's going to come through with what it's committed to. The issue's the timing, and it's going to work itself out," he said.

A spokesman for Rutgers University, the state's largest recipient of the capital funding, said the university had no concerns about whether the money would come through. "The university is a large institution with very strong credit, and we have a commercial paper program to finance projects in the short term," said Greg Trevor, a university spokesman.

A spokesman for Christie's office did not respond Friday to requests for comment. A statement Friday from the Treasury Department noted the issuance of the bonds for the rest of the $1.3 billion, though it said the remainder of the $750 million was not yet scheduled to be fully issued.

Of the more than $540 million addition, $127.5 million was issued last month, the Treasury Department said, and the rest is scheduled to be issued by the end of the year. "Our current plans call for the sale of approximately $200 million . . . in the spring and $220 million . . . in the fall," the statement reads.

As for the remainder of the $750 million approved by voters, the Treasury Department said, it will hold a sale "of an as-yet undetermined amount" of those bonds in the fall.


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