By Josh Moon
Alabama Political Reporter
There seems to be some confusion about Alabama State University’s plan to manage its debt.
At a board meeting last Friday, the trustees heard a proposal from new president Quinton Ross to take advantage of a federal loan program available to historically black colleges to refinance a significant portion of the university’s debt. Additionally, the university will consider borrowing a bit more money at the same time to conduct a few maintenance projects.
The plan would lower ASU’s overall debt service responsibility (by thousands per month) and inject some much needed cash for routine upkeep that has been neglected the last four years.
Somewhere along the way, this idea got twisted.
For some reason, quite a few people seem to think that ASU and Ross are planning to straight up borrow $200 million. I’ve seen social media posts over the last few days from a number of people, including some politicos, saying as much.
Based on what was presented at last week’s board meeting, this is a solid plan. It lowers the payments and provides an opportunity to fix a campus that needs it badly.
And honestly, why am I even explaining this? Auburn and Alabama and UAB and Troy borrow millions of dollars for perpetual construction projects, and no one blinks. ASU wants to borrow a fraction of that to make desperately needed repairs and people fill my email inbox with outrage.
But let me explain this again.
Over the last five years, as the school has struggled through a never-ending forensic audit and multiple investigations — which all turned up no evidence of fraud or wrongdoing by ASU officials — the university’s finances took the hardest hits, as it slashed more $20 million from its operating budget annually.
And with those hits, the upkeep around campus suffered greatly.
Students would routinely share images of overflowing trash cans, dirty elevators, mold, broken ceiling tiles and various problems around campus. Heating and air conditioning systems in some of the school’s largest buildings, including the Acadome, are in need of repair.
ASU is at the point where the disrepair is driving away students.
That does no one any good.
That’s where the HBCU Capital Financing Program comes in. Under the program, which places restrictions on what the money borrowed can be used for, ASU can refinance a large portion of its debt and then borrow for repair projects and some strictly limited construction/acquisition projects.
No one should have a problem with that.
And honestly, I don’t think anyone actually does. Somehow, the details of what’s going on got twisted, and as is sometimes the case with ASU, good intentions were painted as bad.
This plan starts the process of dragging ASU out of a deep, dark hole.
That’s a good thing.