Students to pay fire science academy debt
With no discussion, Nevada university regents on Wednesday approved selling $31 million in bonds to settle a debt from the Carlin Fire Science Academy.
Students had no say in the decision to create the fire training center near Elko, no control over its operations and, since it was designed to provide contract training for professional firefighters, little likelihood of ever attending classes there.
But under the plan approved by the board, they get to pay off the debt.
The bonds are backed by student fee revenues that will be diverted to the academy instead of student needs at the University of Nevada, Reno campus.
The good news is that, because of the depressed economy, the bonds will cost the Reno campus 5.3 percent interest so they won’t dip as far into student fees as originally feared.
When UNR President John Lilley told regents the revenue bonds would have to be backed by student fees, several members of the board led by Steve Sisolak protested strongly, saying it was unfair to saddle students with a major error made by UNR administrators.
“We may have no other option,” Lilley told regents in October.
The problem, according to staff, is the fire academy lost more than $4 million in the two years it operated. In addition, environmental officials said it was allowing contamination to leak into the ground beneath the center.
Yet the university was locked into a 20-year operating agreement with All Star Investments. University counsel Tom Ray advised regents in October the settlement agreement with All Star and General Motors Acceptance Corp., which loaned the money to build the center, would save $12 million compared with the original contract.
The bond money will settle the contract, buy out All Star and pay to repair and rebuild part of the academy.
Sisolak originally said making students pay would be “grossly unfair.” But by Wednesday, all members had apparently been convinced there was no other source for the funds.
The debt will not actually increase student fees above the amounts already approved for UNR. But instead of going for projects to benefit students on campus, the extra money will go to make payments on the bonds.
UNR officials are still working on a business plan to turn the center into a money maker. It was originally conceived as a state-of-the-art training center for firefighters.
The lone no vote was Mark Alden’s. Sisolak was out of the room when the vote was taken.