Budget director: Use bonds, not cash, for buildings

2013-04-09T17:41:00Z 2013-04-10T00:12:07Z Budget director: Use bonds, not cash, for buildingsBy CHARLES S. JOHNSON Gazette State Bureau The Billings Gazette

HELENA — Gov. Steve Bullock’s budget director urged a Senate committee Tuesday to finance nearly $100 million worth of new and renovated state buildings by issuing bonds, instead of paying cash.

“We continue to believe that with low interest rates and the state’s sterling bond ratings, we have an ability to issue bonds,” Budget Director Dan Villa told the Senate Finance and Claims Committee. “The cash would go into the ending-fund balance.”

These projects originally were part of House Bill 14, the bonding bill sponsored by Rep. Galen Hollenbaugh, D-Helena, but they were folded into HB5, the long-range building plan, in two stages recently. First, the money for the proposed new Montana Historical Society building was moved to HB5 and then the university system buildings were. HB5 is sponsored by Rep. Duane Ankney, D-Colstrip.

HB14, as written, would have required a two-thirds majority vote in both the House and Senate, while HB5 requires just a simple majority. Backers said they anticipated trouble obtaining the super-majority vote in the House.

However, forking out nearly $100 million in cash for the buildings has helped throw the state’s projected ending-fund budget out of balance.

As it stands, HB5 proposes spending nearly $228 million on buildings, habitat, fisheries, building safety and other projects. That figure includes $63 million in matching funds that colleges and universities must raise to proceed with their projects.

A number of people spoke on behalf of the building projects, as had been the case at previous hearings.

“This is a win-win deal,” said Cary Hegreberg, executive director of the Montana Contractors’ Association.

He said he hopes Montana contractors will be hired to construct the university system buildings, which in turn will train future workers for contractors to hire.

The lone controversy again involved a group of Missoula people who don’t want to see the new Missoula College facility built on what’s now the University of Montana golf course.

“I believe we would all support the building of Missoula College, but not on a valuable property such as the Missoula golf course,” Margaret Caraway said.

Lewis Schneller said was imploring the committee to split off the UM funding from HB5.

“We’re on a mission to save that open space and save that golf course,” he said.

Sen. Dave Lewis, R-Helena, said he continues to receive emails opposing the Missoula College building proposal at the golf course site, with some mentioning threats of litigation. He raised these concerns with Higher Education Commissioner Clayton Christian.

“With this dark cloud and litigation hanging over it, I’m struggling with setting aside $29 million in cash,” Lewis said, referring to the Missoula project.

Christian said the UM and the university system are on solid ground building the project at the golf course site. Some campus buildings have already been constructed near there, he said, and 1,000 students live there.

“We’re not a golf academy,” Christian said. “We’re an institute of higher education. We need to focus on our students.”

The current Missoula College facility, built to hold 700 students, is “extremely outdated” and can’t adequately hold the current 2,700 students, he said.

“We’ll find a way through this,” Christian said. “It’s not a dead-end road for us…. If we have to go somewhere else with the building, other options exist.”

Some who opposed construction of the new college on the golf course suggested building it at Fort Missoula instead.

“If you think the ‘save the golf course’ (group) is organized, you ought to see the Fort Missoula group,” Christian said.

Christian, who lives in Missoula when he’s not in Helena for his job said, “I appreciate Missoula for what it is.”

He added, “I’m not sure we’ll find a place in Missoula where we’ll find a kumbaya moment. We need the funding for the Missoula College. We’ll find a place for the college.”

The committee took no immediate action on HB14.

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