More than $30 million would be available to help build a proposed Interdisciplinary Engineering & Academic Studies Building at the Edinburg Campus – currently The University of Texas Pan American – of The University of Texas Rio Grande Valley, Rep. Terry Canales (D-Edinburg,) and the Edinburg Economic Development Corporation have announced.
UT Pan American, along with The University of Texas at Brownsville and the Regional Academic Health Centers in Edinburg and Harlingen, are in the process of utilizing their assets and resources to create a new university, The University of Texas Rio Grande Valley, which will include a full-fledged School of Medicine with campuses in Edinburg and Harlingen.
The EEDC, which is the jobs-creation arm of the Edinburg City Council, along with the mayor and city council, have made the construction of the new engineering complex one of their legislative priorities at the State Capitol.
The proposed financing is included in a statewide measure, House Bill 100, of which Canales is a co-author, which received final approval in the House of Representatives on Thursday, April 9. An identical measure is being considered in the Senate.
House Bill 100, whose primary author is Rep. John Zerwas, M.D. (right,) a Republican from Richmond – and Chair of the House Committee on Higher Education – authorizes the issuance of $3.1 billion in tuition revenue bonds throughout the state for institutions of higher education, including in the UT and Texas A&M systems, to finance construction and renovation of infrastructure and facilities.
“The UT System has plans for a $50 million, state-of-the-art academic complex that would help prepare more engineering students while also addressing space requirements for other academic disciplines as needed,” Canales said.
“What the House has approved – $30.6 million – goes a long way toward helping the UT System reach this very important goal.”
Canales also noted this latest project is in addition to several major facilities already underway at the Edinburg campus.
“In 2013, the UT System authorized funding for the construction of a $70 million Science Building Annex at UT Pan American and $54 million for a UT medical school academic building next to the Edinburg campus,” Canales said.
“This is in addition to the $42.6 million, 1,000-seat Academic and Performing Arts Center at UTPA, also already funded, which is well on its way to being completed.”
All higher education institutions seeking revenue through House Bill 100 had to settle for less than they had originally requested, but still are on the way to receiving major facility upgrades and new construction at their respective campuses, the House District 40 lawmaker explained.
Canales said the UT System could provide the balance to reach the $50 million target for the new complex through numerous ways, including by using some of its own vast financial resources, through cost-savings at UTRGV, private contributions, or other options.
“We have come up with most of the bonding authority requested by the UT System, and I am confident they will do what it takes to meet the needs of our best and brightest students,” Canales said.
The $30.6 million for the new facility in Edinburg authorized by HB 100 would be raised in part through the use of tuition revenue bonds, which are funds generated from tuition charges levied against students or universities. As more students are enrolled, more money from tuition is generated that is used to help repay the debt from tuition revenue bonds.
The majority of the money for the new construction, however, comes from funds provided by the Texas Legislature, not from the students.
Tuition revenue bonds (TRBs) are financial instruments that higher education institutions secure with pledged future revenue, such as tuition and fees, to help fund capital projects, according to the House Research Organization, which is the research arm of the House of Representatives.
TRBs are for certain projects outlined in Texas Education Code, ch. 55, the House Research Organization further explains. These include purchasing, constructing, improving, enlarging, operating, or maintaining any property, buildings, structures, activities, services, operations, or other facilities. The Legislature must authorize the issuance of TRBs in legislation.
Canales gave credit to:
- UT-RGV leaders, including President Guy Bailey and
- UT-Pan American Ad Interim President Havidán Rodríguez, as well as to
- the Edinburg mayor,
- Edinburg City Council, and
- Edinburg Economic Development Corporation, for helping rally legislative and political support for what would be the latest and one of the largest new facilities on the Edinburg campus.
“Mayor (Richard) García, along with President Bailey and President Rodríguez, continue to play vital roles in helping the Valley state legislative delegation successfully fight for our fair share of state and UT System resources,” said Canales.
“Once final legislative approval is secured, and we get the governor behind it, as I expect he will support this legislation, there will be another monument of higher education rising into the Valley skyline.”
Mayor García also serves as President of the Board of Directors for the EEDC, which is the jobs-creation arm of the Edinburg City Council. Agustín “Gus” García (no relation to the mayor), serves as EEDC Executive Director.
“The decision of the House of Representatives to support UT Rio Grande Valley through $30.6 million in legislative funding for UTRGV’s Engineering and Academic Studies Building will enhance the learning experience for our students and greatly impact student success. We are thankful to Representative Canales for his commitment to UTRGV and the entire Valley delegation for their support on this endeavor and all of our major priorities for this legislative session,” said Bailey, the founding president of what will become one of the largest higher education systems in the state.
Bailey, whose extensive credentials include having served as president of The University of Alabama and Texas Tech University, envisions UTRGV quickly attaining such national prominence.
“The creation of UTRGV has long been underway and together, we are building a greater university and expanding educational opportunities for students in the Valley,” Bailey said. “The commitment of our state legislators to the advancement of higher education in South Texas will continue to play an integral role in the changing economic and educational landscape of the Rio Grande Valley.”
Last summer – on Thursday, July 10 – The University of Texas System Board of Regents, during a meeting in Austin, approved a proposal to ask state lawmakers to authorize $42.5 million in tuition revenue bonds to help pay for construction of a $50 million Interdisciplinary Engineering and Academic Studies Building at the Edinburg campus of UT Rio Grande Valley.
As initially envisioned by the UT System Board of Regents, the Interdisciplinary Engineering and Academic Studies Building would be built on the campus quad – its open-air courtyard – west of the Edinburg campus’ main library.
“This project (Interdisciplinary Engineering and Academic Studies Building in Edinburg) would create an additional 124,304 GSF (gross square feet) with 80,798 assignable square feet of much needed space. The spaces will include a large lecture auditorium with a 250-seat capacity, several 150-seat lecture halls, 60-seat classrooms, and faculty offices,” noted a UT System synopsis of the project. “The project will also include an outdoor pavilion to be used as a gathering area and study space to relieve pressure on more expensive indoor space and also to support academic events.”
Once the funding plan clears the Legislature, facility programming could begin in October 2015, with design development approval scheduled for August 2016, leading to occupancy by August 2018.
“The University of Texas Pan American continues to experience an increase in its student population, and with nearly 30,000 students enrolling and transitioning to UT Rio Grande Valley, it is imperative that we address our critical need for space to support this enrollment growth,” said Rodríguez, who has the honor of being the final president of UT Pan American.
Rodríguez, who also serves on the Board of Directors for the Edinburg Economic Development Corporation, will remain with UTRGV as its founding Provost and Executive Vice President for Academic Affairs.
“Enrollment in UTPA’s engineering programs has already exceeded 2,200; however, our current engineering building was only designed to accommodate about 1,400 students. UTRGV is the perfect steward of these state funds, which are going to be utilized in the best interest of our students and to ensure their success,” said Rodríguez. “The support of our legislators speaks volumes about our strong and ongoing partnerships and their interest in the success of our students in South Texas.”
During his presentation last summer before the UT System Board of Regents, Bailey encouraged regents to look for ways to use high-technology to increase the efficiency of the classroom settings, noting that UTRGV could serve as a model for other UT System campuses.
Responding to suggestions that space needed for a large lecture hall, as proposed for the new facility, might be better used for more, but smaller classrooms, Bailey said he and his staff would work with the architects of the facility to address that goal.
“The fact that you are teaching a large lecture doesn’t mean that class is limited to that particular space,” said Bailey. “By using technology, we can both offer our class in a large lecture hall and in a small classroom. Through things like video streaming, you can offer that.”
In general, video streaming is a term that refers to providing video, in real time, using the Internet for viewers such as students in a classroom.
“Most students who come to a traditional institution want face-to-face instruction,” Bailey added. “We know we are going to be offering instruction in a variety of different mechanisms, so we anticipate offering classes in classrooms, online, some of those video-streamed as they are being taught.”
HISTORY OF TUITION REVENUE BONDS
In its detailed analysis of HB 100, the House Research Organization provided the following background on tuition revenue bonds, both in previous legislative sessions, and in this legislation.
The HRO perspectives follow:
Supporters of tuition revenue bonds (TRBs) contend that they are essential for the state’s higher education institutions to build and maintain facilities, provide for enrollment growth, and remain competitive. Since their inception, TRBs successfully have funded capital construction projects at institutions of higher education.
These bonds are a cost-effective way to fund projects such as new labs and classrooms that are not likely to be funded by other means. Without TRB funding, institutions would have to fund capital construction projects in other ways, such as by raising tuition.
Other funding mechanisms, such as the Permanent University Fund (PUF) and the Higher Education Fund (HEF), are limited in their ability to help institutions fund needed capital growth and facilities upgrades. The long-term financing structure provided by TRBs allows for larger projects. Private contributions can take a long time and are competitive, which puts smaller colleges at a disadvantage. In addition, these donations typically come with stipulations on how they may be used.
TRBs are the best option for funding capital construction projects, as other alternatives have failed to gain traction.
Authorizing TRBs for new facilities at the state’s universities also would accommodate enrollment growth, allowing more Texans to pursue higher education. Texas institutions have experienced rapid increases in enrollment over the past decade, in part due to statewide initiatives that encourage postsecondary education.
Texas’ population is expected to grow even more in coming years, and this growth will further strain the state’s existing infrastructure. Institutions could admit more students and make higher education more attainable if they were able to build new facilities.
The TRBs provided in this bill would be a good investment for the state because they have a high return.
The bonds would be used to expand and improve facilities, including science and engineering research labs. Research and development at universities benefit all taxpayers, not just students. Moreover, investment in state-of-the-art facilities would help attract high-caliber students pursuing science, technology, engineering, and mathematics (STEM) degrees. Graduates of STEM programs earn higher wages, which benefits the state in tax revenue.
The Texas Workforce Commission has projected a workforce shortage in STEM-related jobs, and schools have focused on improving their abilities to meet these needs.
No new TRBs have been authorized since 2009, when the Legislature issued $155 million in bonds largely to repair hurricane damage at the University of Texas Medical Branch at Galveston. The last major statewide authorization was in 2006, when HB 153 by Rep. Geanie Morrison, R-Victoria, authorized $1.9 billion for projects at 47 institutions.
Institutions, some of which have fallen behind high schools in the quality of their facilities, have put off needed repairs and construction since that time. Now is an opportune time to fund TRB requests because interest rates and construction costs are relatively low and the state has enough money to fulfill many of the institutions’ capital construction needs.
TRBs do present a cost to the state, but they are no different from other investments the state makes in legislative priorities. All debt involves risk, and financing for any state program is the responsibility of future lawmakers.
To demonstrate that higher education is a state priority, the Legislature typically appropriates general revenue funds to reimburse institutions for the tuition spent toward debt service on TRBs. In addition, while there is no guarantee the Legislature will authorize TRBs each session, any state-funded program or entity must plan for the future while facing uncertainty about whether the Legislature will approve its funding.
Although online learning has grown, there is no consensus on whether it should replace classroom learning. A need still exists for construction of facilities such as labs, where students need to engage in applied learning that cannot be done online, and professor interaction is an important part of education.
The investment in a building that could last several years and serve many students also may yield a better value than technology that must be upgraded every few years and that requires students to buy new computers and software.
Abbott state of the state3bHB 100 would demonstrate necessary fiscal discipline by not fully funding all of the TRB requests made this session. TRB authorizations for larger universities in the bill reflect that these schools serve larger student populations, but smaller schools, particularly newer campuses, also would receive needed support in the bill.
Gov. Greg Abbott has made clear that he wants more Texas higher education institutions to be top research universities. HB 100 would invest meaningfully in building and improving facilities at the state’s universities, which would help attract renowned faculty members and researchers.
Texas institutions must improve to compete — not only with one another or with those in other states but globally.