This post was originally sent to the GUARDIAN as a comment from a reader. We felt it worthy of a full blown post.
By DEAN GUNDERSON
BSU has held an A1 Bond rating by Moody’s for its last few issuances. This puts it on a relative investment risk on par with the countries of South Korea, the Czech Republic and Estonia (not great, but not bad either).
What Moody’s is concerned about is the increased amount of pressure university’s will experience to commit their financial reserves to service long-term leases in these types of public/private ventures. And, this is a much bigger issue than just little ol’ BSU.
In 2002 bonds issued by Greece, and in 1996 bonds issued by Iceland, also had A1 ratings — and look where these two countries have ended up.
If BSU continues to play with the public/private venture “fire” it’s going to get its fingers burned by having its bond ratings dropped to A2 — identical to Botswana’s ratings. This will adversely effect its ability to sell bonds at favorable rates and leave it unable to fund much-needed capital projects.
I’m not opposed to BSU providing much needed on-campus student housing, but it should be on-campus and state-owned. Further, on-campus student housing should also automatically generate a higher land-use efficiency — freeing up poorly utilized land, “land banked” as surface parking lots and an overabundance of one- and two-storey structures.
The last time I checked, students who live in on-campus dormatories also have a car parking space set aside for their use. Whether such spaces are for lease (rolled into the dorm room’s rent, or acquired through a parking permit purchase) or made available for “free” — is a terrible waste of precious land resources. If a student lives on campus, they shouldn’t also have a parking space available for their use.
If BSU were really interested in improving their financial rankings, it needs to run a tighter ship by improving how they use their existing resources (all resources: financial, human, and land).
A consistant theme of Kustra’s tenure has been: “Private good, Public bad”. Few have questioned this approach, as long as they stood to gain. But, public education is not a private corporation — and it cannot be operated like one. It has to be held to a higher ethical standard and it must be absolutely transparent in its business dealings. Kustra, unfortunately, runs a very opaque administration — and I, for one, am very appeciative that Moody’s stance brings to light the inherent risk associated with public/private ventures.
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