Texas A&M releases funding plans for pair of projects [The Eagle, Bryan, Texas]
(Eagle (Bryan, TX) Via Acquire Media NewsEdge) July 01--Editor's note: This story originally said the university's information technology services were to be outsourced. That is incorrect. The university has announced a move to outsource the campus' dining, landscape, janitorial and building maintenance services.
Texas A&M made statewide news twice in recent weeks by announcing two major projects designed to grow its presence and prestige in the academic world.
But the announcements -- the purchase of the Texas Wesleyan School of Law in Fort Worth and the establishment of a federal biodefense research center on its College Station campus -- also raised eyebrows for their price tags.
A&M will spend $25 million to buy the law school, and will likely invest much more to bring the school up to its standards. And the A&M System has committed $18 million for the biodefense project.
But money is scarce at A&M, as its two main sources of revenue have stayed flat or been cut in recent years. The A&M System Board of Regents has resisted tuition increases -- despite criticism by some who believe they are necessary to invest in faculty and other academic enterprises. And state funding was cut in 2011 and likely won't be replenished in the 2013 session of the Texas Legislature.
The situation caused some to question A&M's judgment in pursuing new major projects. One state senator called the moves "empire building" last week and said the university would have a hard time justifying them to the Legislature.
A&M officials, meanwhile, say the projects will have transformative effects for the university. They will find the money, they said, and it will be worth spending.
"Texas A&M is making a strong statement on a national scale that the university is a major player and has a very bright future," said Vice President for Marketing and Communications Jason Cook.
A&M officials say they are confident that the biotechnology facility will be a financial boon for the school, not a drag. The federal government has committed to spending $176 million over the next 5 1/2 years on the project, which is being built to prepare the nation for pandemics and biological attacks. A&M is expected to contribute $18 million.
That kind of payment is standard in major federal projects because the government wants its partners to have "skin in the game," said the project's leader, A&M System Vice Chancellor for Strategic Initiatives Brett Giroir.
But Giroir said A&M's actual costs will be less than they seem. Between $10.5 million and $11 million will come from in-kind contributions -- mostly money spent on the salaries of people who work in the facility.
Giroir said almost all of the workers the system plans to use -- "everybody, except maybe a handful," he said -- are already employed by A&M, meaning the payments won't be much of an additional expense. In fact, Giroir said, A&M could achieve some savings because the federal government will pay 75 percent of the salary of those employees.
Giroir, for example, currently collects a $295,000 salary from the A&M System. Once he moves to the new biodefense center, the federal government will pay three-quarters of his salary, he said. That means savings for A&M, he said.
The remaining $7 million will be paid in cash, mostly to construct new facilities and upgrade existing A&M buildings on campus. A&M and the A&M System will share that cost, though Giroir said he didn't know how much each entity will pay. And, just like it will for the salaries, the federal government will cover three-quarters of the cost of the building upgrades.
Giroir said he can't disclose where new buildings will be constructed or which current ones will be renovated. That information is proprietary, he said. But A&M could end up making a profit, he said, because some of the project's private partners will pay rent for offices and research space in the buildings. All of A&M's costs in the project, Giroir said, will come from the first 5 1/2 years. The government has an option to expand its contract with the university system for up to 25 years. If it does, A&M would receive $432 million more and have no further required contribution, Giroir said.
In the end, the university will come out in the black, he said. And he said he doesn't anticipate any money will need to be diverted from other A&M or System projects.
Plans for the law school are less sure. Chancellor John Sharp told The Eagle on Tuesday that he expects private donations to cover a substantial amount of the $25 million purchase price -- $20 million is due when the sale is finalized and $5 million will be due five years later.
"There is an awful lot of support among the former students association and the alumni of this university," he said at the time. "The things I have been hearing this morning indicate that there may be as much support or maybe more than the [biotechnology] grant."
University officials said that they have already received one "major gift" since the announcement, but that the donor and amount are confidential.
Cook said the true process of fundraising hasn't yet begun. The A&M System Board of Regents didn't sign a letter of intent to buy the law school until Friday. That letter says that A&M will only buy the school if it is able to secure the necessary accreditation from the Texas Higher Education Coordinating Board and various legal groups. A&M has about a year to accomplish that, meaning it also has a year to raise the money.
"The one thing we have to understand is that this is a distance race, not a sprint," Cook said.
The initial costs won't be the only expense, however. The Texas Wesleyan School of Law is currently considered a fourth-tier school. A&M president R. Bowen Loftin said last week that he hopes A&M can lift it up to the first or second tier. That will require a considerable investment.
Cook said the university has just begun reviewing how it will do that. It's too soon to say how much that will cost, he said. But he acknowledged that it will be a challenge.
State Sen. Steve Ogden, R-Bryan, is skeptical that such an effort is worth it. Job placement numbers for law school graduates are low, Ogden said, which will cause many legislators to wonder whether the state should be funding more training for them.
And some lawmakers in Dallas and South Texas may complain that A&M is cutting in line, Ogden said, since those areas have been working for years to host a public law school.
If the money doesn't come from the Legislature, it's unclear where else it is available. The A&M System Board of Regents has shown little willingness to raise tuition or fees.
A&M officials did announce recently that they expect the university to receive $260 million in additional revenue and savings over the next 10 years by outsourcing its janitorial, dining, landscaping and building maintenance services. Sharp said at the time that most of that money will be spent on academic ventures, but it's unclear if that will include the law school.
"That is a logical conclusion, but that hasn't been determined," Cook said.
Cook added that A&M has tried for decades to get its own law school, and it's unclear whether another opportunity will present itself. It would be shortsighted to pass up that chance because money is currently tight, he said.
At least some professors seem to agree. Peter Hugill, a professor of geography at A&M and president of the Texas branch of the American Association of University Professors, said most major research universities have a law school. Having one at A&M will be a good thing, even if it costs some money.
"When, as a professor, you work for a major university, the ranking of that university is sort of important to you because that is your prestige level," he said. "It is part of your identity as a faculty member."
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