The OU Board of Regents approved Wednesday more than $63 million dollars in bonds to be taken at the university’s discretion.

The funds will go to projects that have already been approved by the board but need additional funding to be completed. The bonds would be taken out when OU officials believe the bond market and the economy improve, OU President David L. Boren said at the meeting in Norman.

The other 32 items on the agenda were approved unanimously, including a total budget of $76 million for a new chilled water plant and changes to the faculty and staff paid leave policy.

Bond issues

The $63.4 million bond issue would be used to fund projects that are already in the works or are absolutely necessary for OU to function.

However, the bonds will not be sold until OU officials believe the time is right.

“We will not take action to actually sell the bonds until there is improvement in the bond markets,” Boren said.

In order for OU to get the money it needs, brokers must be willing to buy the bonds, giving OU the money with an expected return including interest. Because of the current volatility of the market, brokers are buying fewer bonds at much higher interest rates than they were this time last year or even last spring.

At one point a few weeks ago, the bond market was non-existent. That put a strain on many governments and institutions and nearly drove the state of California to ask the federal government for a $7 billion loan.

Now, interest rates, even on highly rated bonds are enormous. Boren said OU officials would wait to take the $63 million in bonds until those rates improved and money became more available.

Boren said projects he would like to start now will have to wait until market conditions improve and more funds are available.

“We shouldn’t stop dreaming our dreams and thinking of ways to be better,” Boren said. “But what we do have to realize is that sometimes, what we intend to do in one year, it may now, because of financial conditions, be a two-year plan or a three year plan.”

Some of the projects that the bond issue will help fund include:

• $6.5 million for Gould Hall renovations,

• $5 million for Cate Center renovations to create more office space for faculty,

• $3 million for Collings Hall renovations and

• $26.4 million for a new steam and chilled water plant for new and renovated buildings.

Boren said there are three or four projects he would like to begin now, but in order to keep tuition and fees as low as possible, they will have to wait.

“The students and their families are going to face tough times in the coming years,” Boren said. “We don’t want to get ourselves under the pressure that would push more cost to students.”

Boren said taking action now, like taking out as few bonds as necessary and putting a freeze on hiring, will help ease the strain on OU’s budget.

So far this year, Boren said the rate of increase in OU’s operating costs has declined by about $5 million, or about 20 percent. This year’s operating cost increase is smaller than last year’s, which has helped push tuition up nearly 10 percent this semester.

Boren said revenue will begin to flow from several of the projects, like the steam utility plant, that will help pay off the bond debt once it is taken.

“A number of these [projects] are self-funded from the revenues that will be produced,” Boren said. “The funds will be coming in to service this debt.”

However, Boren said he does not expect the markets to get much better any time soon.

He called on Gov. Brad Henry to tap into Oklahoma’s rainy day fund, which has almost $600 million, to help institutions and the Oklahoma government itself pull through the economic difficulties with as few bruises as possible.

“If this isn’t a rainy day, I don’t know when you’d ever have a rainy day,” Boren said.

Chilled Water Plant

One of the largest projects in the bond is a $76 million utility plant that needs to be built soon to provide air conditioning, heating and electrical services to the new and renovated buildings on campus, Boren said.

The plant, which is the fourth on campus, will be constructed north of the Huston Huffman Center.

More than $26 million of the funding for the project would come from the bond issue that was approved Wednesday.

“Obviously, it’s dependent on the same contingencies related to the bond financing,” said Nick Hathaway, vice president of finance and administration at OU.

Boren said this project, which has not started construction, will provide necessary utility support to several new buildings, such as Devon Energy Hall, Gaylord Hall Phase II, Old Science Hall and the Student Academic Services Center.

“It’s one of those things we can’t put off,” Boren said. “This has to go through.”

Other items approved

• Air Charter Service for the 2008-2009 basketball season will cost $554,640, which will come from the Athletics Department operating account.

• Mark White was named as the first curator to the new Adkins Collection, containing more than 3,300 items. The collection will be housed in a new addition to the Fred Jones Jr. Museum of Art.

• Elm Avenue Parking Facility will be repaired and restored during Winter Break for no more than $450,000.

• The property at 720 W. Boyd St., known as the Logan Apartments, is being sold by OU to a developer who will renovate the vacated building into high-end apartments. The proceeds from the sale will go to the Logan Family Scholarship Fund, per the families’ request at the time OU bought the property.