The money needed to build is there, but paying back the loan could mean another increase for the transportation access fee.
Parking and Transportation Services sold a 20-year bond, which was set aside for a new parking garage, two weeks ago for $12.7 million. Now that the money has been secured, construction can soon begin for the parking structure estimated to cost about $14 million. But paying back the money borrowed could cost students and faculty if the university wants a third parking garage.
Greg Sylvester, director for Parking and Transportation Services, said he is not certain how much the transportation access fee increase will be for the next academic year.
Sylvester said the increase to the $2- per-credit-hour fee that occurred for the first time this year was used toward the current plans for a second parking garage.
But any further increases would be used to help pay for a third parking garage, which may be built near the Fine Arts area.
Fitch Rates, the company that assigned an ‘A’ rating to the parking bond, noted that there is a plan to increase decal prices $5 per year and to increase the transportation access fee 75 cents per credit hour in 2004.
Pam Clayton, senior director for Fitch Rates, said the bond was sold Nov. 21. But before selling any bond, she said, a rate needs to be issued to determine if there is any credit risk involved in meeting the debt that will have to be repaid.
Clayton said generally the universities pay off debts is by creating revenue. And in Parking and Transportation Services’ case, Clayton said the transportation access fee is an issue centering around whether there is a demand from students willing to pay the price for more parking.
Clayton said Fitch Rates did not suggest an increase in the fee but that doing so could have been the university’s decision.Sylvester said students and faculty can expect to see future increases, but in increments rather than a one-time “large-raise rate.”
“That’s the feedback we got from people when the master plan was proposed,” Sylvester said.
Carl Carlucci, executive vice president for budgets, human resources and information technologies, said there is no pay schedule yet as to how the money will be dispersed during the construction of the parking structure, which is expected to begin in August.
Carlucci said the transportation access fee may need to be increased to help pay for the loan Parking and Transportation Services has now that the bond has been sold.
But how much longer will the fee continue to increase?
Carlucci said that depends on how the students and the university fill the amount of parking spaces needed due to increased enrollment throughout the years.
And before any money from the bond is used toward the 1,200-space parking structure, a contractor still needs to be hired, Sylvester said.
Three contractors, Sylvester said, will meet with Parking and Transportation Services Monday to present designs and their bids. After evaluating the prices, a contractor will be hired. But depending on the offers Parking and Transportation Services has to choose from, the price of the garage could either increase or decrease.