Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

January 8, 2009

Trustees okay bond issue for capital projects

The executive committee of Pitt’s Board of Trustees has authorized University officers to issue up to $300 million in tax-exempt bonds to fund current and future capital projects and to refinance any or all of the University’s $655 million in outstanding tax-exempt bonds if market conditions warrant.

The executive committee, in a Dec. 16 session that immediately followed a budget committee meeting, also approved $39.4 million in funding for capital budget projects as an addition to the University’s fiscal year 2009 capital budget.

More than $43.1 million in capital budget projects were approved by the trustees’ property and facilities committee Nov. 7. (See Nov. 20 University Times).

The seven projects are: the acquisition and site preparation of Robinson Court property; Amos Hall renovation; Van de Graaff Building second floor laboratory renovation and infrastructure upgrades; mid-campus complex research generator installation; William Pitt Union fifth floor renovation; the Pitt-Greensburg recreation center, and South Loop steam line distribution system revisions.

The trustees previously approved $2.5 million for the projects; UPMC will contribute $1.23 million for steam line upgrades.

Art Ramicone, vice chancellor for Budget and controller, said the exact amount of the bonds the University will float has not been determined. Background materials provided to the trustees’ committees estimated some $25.4 million in financing would be needed for capital budget projects anticipated for fiscal year 2010 and $139.2 million would be needed for FY08 and FY09 capital budget projects. In addition to that $164.6 million total, $133.6 million in the University’s reserve and other institutional funding for the capital projects also may be eligible for reimbursement with bond proceeds, the background statement indicated.

Future capital budget expenditures include preservation projects and classroom upgrades, “Unless things freeze up and things get worse we’d continue to do that kind of maintenance,” Ramicone said.

“Rates are pretty low these days if you have the type of credit rating we have — double A,” which indicates a low credit risk.

Likewise, rates are good on the other side of the borrowing table. Ramicone noted that the University always is watching for opportune times to refinance existing debt, “just like with a home mortgage,” he said.

“If they’re favorable — because right now rates actually are fairly low — we’ll refinance. If the market moves against us, we’ll stay with the current bonds.”

—Kimberly K. Barlow

Filed under: Feature,Volume 41 Issue 9

Leave a Reply