The National Park College Board of Trustees approved a resolution this week issuing bonds to finance on-campus housing.
The resolution, which was approved at a special called meeting on Thursday, authorizes issuing bonds in an amount not to exceed $9.9 million, to finance all or a portion of the costs of acquisition, construction, furnishing and equipping of a new student housing facility.
The resolution states the board intends to secure and repay the bonds from a pledge of student tuition and fees payable by all students enrolled and revenues derived from auxiliary enterprises of the board, "including, without limitation, bookstore and housing facilities."
The board approved a resolution in November 2018 to enter into contract negotiations with Servitas to build and operate the three-story residence hall on land leased by the college. According to a news release, a comprehensive feasibility study revealed a significant demand for affordable housing options at NPC. While demand was estimated to be approximately 237 beds, Servitas recommended starting with a 180-bed facility.
According to the release, results from the study also indicated more than half the 586 respondents were 17 to 24 years old, and 86 percent of them would consider on-campus housing. One quarter of all respondents commute more than 40 miles each day to attend NPC and 15 percent travel more than 60 miles daily.
Steve Trusty, vice president for finance and administration, presented the new resolution Thursday, explaining the shift from the public-private partnership that was part of the original plan.
The decision was reached after "much discussion" with bond counsel, the release said, and Trusty said financing the project directly would be of benefit to the college and students.
"This project will provide some extra funds for extra security on campus and then eventually will provide increased dollars over the other avenues probably to the tune of $100,000 a year back to the college," he told the board. "So, there are some benefits to the school and they want us to be successful."
Trusty said the college would save about $7 million dollars in interest over the life of the bond and cut years off the term.
Leigh Ann Biernat, of Stephens Inc., Advisory Services, said the annual debt service preliminary interest rate is about $490,000 a year for 30 years. Trusty added that, previously, the annual debt service was almost $690,000 a year, making for a savings of about $200,000 a year in debt service.
The college has set a goal to have construction completed by the fall semester of 2020.
"I know we're throwing a lot of change," NPC President John Hogan told the board. "We've got the confluence of athletics and the new programming, and the SAU relationship all coming at one time ... and these are all pieces of the growing pains that we're going through as a college. I understand that we have to evaluate all of those things."
Board Chairman Forrest Spicher added that recruitment of students is "very fierce competition."
"We want to make (higher education) affordable and economical, and convenient for students who are right here in our backyard or around the state to be able to come here in a peaceful environment, beautiful setting and have a high-quality educational experience," he said. "We're stepping out of our static history and it's becoming a little more dynamic, but I think the reward is substantial ... the students are going to succeed, I think our enrollment is going to grow, we're going to have more people coming to Hot Springs and staying for a brief time.
"I hope many of them will stay in Hot Springs and live here, and we'll create jobs here and we'll have a successful and thriving culture. I think this is part of the equation, whether it's the commons, honors program, athletics. There's a lot of factors and I think a residence hall is a piece of that puzzle. I'm convinced that we're heading in the right direction."
Local on 06/09/2019