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SANTA FE, N.M. — Northern New Mexico College’s plan to build its first on-campus dormitories has hit a major obstacle.
Gov. Susana Martinez and others on the state Board of Finance have declined to act on the college’s proposal for financing the dorms amid concerns over the college’s troubled finances.
Northern asked the board to approve revenue bonds that would have provided up to $16 million, $13.3 million of which would have paid for the dormitory project.
“I think we need more time in viewing the stability of the institution before there’s continued investment,” Martinez said during a July 15 Board of Finance meeting. “There has to be some confidence on the part of us to turn around and say this is worth the investment right now … .”
Martinez and other board members expressed concern about the financial condition of the college, which in the spring cut three degree programs, several faculty positions and childcare to close a $250,000 budget gap.
The college, with campuses in Española and El Rito, and an enrollment of about 1,300 full-time students, planned to break ground this fall on three three-story dorms to house roughly 200 students at its Española campus.
The governor said she didn’t think it made fiscal sense for the college to take on more debt right now. “Maybe this is something that needs to wait a year to see where we are. Are we seeing growth? Are we not seeing growth?” she said. “I’d rather do the more responsible thing, rather than dig ourselves deeper.”
Ricky Serna, Northern’s vice president for advancement, said the college isn’t giving up on its goal to construct dorms in time for the 2015-16 school year.
He said in an email to the Journal, the college is looking at other options for funding, including “a public-private partnership or a privately developed building near the College campus.” The project “remains a priority for the College,” he wrote.
During last week’s meeting, Domingo Sanchez, Northern’s vice president for finance and administration, said the dorms would provide an additional revenue source for the college, which has suffered through financial difficulties as the student population has declined. Enrollment has dropped by about 400 students – more than 20 percent – since 2011.
Sanchez said Northern, which was put on fiscal watch by the state in 2007, was in the process of pulling out of dire straits and had completed four clean audits for prior fiscal years in the past year, with the last one expected to be finished in October. “We’ve got our ducks in a row,” he said.
Sanchez said the dorms were projected to increase enrollment by 3 percent the first year.
Board member Michael Brasher asked if the college had a backup plan if projections weren’t met or an emergency arose. “If we have to reduce our operating budget, expenditures in other areas to meet our obligation, we would do that,” Sanchez said. He assured the board the college could still tighten its belt more by cutting back on student services, travel and maintenance, if necessary.
Northern President Nancy “Rusty” Barceló said the dorms were an important part of college’s marketing strategy. She said dorms would allow the college to attract students from beyond a 40-mile radius.
The college is losing students in the northern-most reaches of New Mexico to colleges in Colorado, she said. “We’re finding more and more of those individuals who would like to come to Northern but, because we do not have housing, that poses a problem,” Barceló said.
Serna said a student survey showed there is a demand for on-campus dormitories. “We are the most affordable four-year institution in the Southwestern United States,” he said. “By not being able to provide our students with housing, we leave them no choice but to attend the more expensive institution when they could attend ours at a lower cost.”
Board members also questioned college officials about Northern’s low bond rating and $978,000 the college paid to Indianapolis-based Monument Collegiate Housing.
Tim Pitcher, the company’s president, said the fee covered a student housing study, student housing surveys, financial and marketing analysis, positioning study and schematic designs. “They (Northern) wanted a complete package because they needed to put together the whole picture before they could present it to you,” he said.
Brasher asked, “So, you did the study to identify that there is a need for the housing and that you’re the contractor who will do it?” Pitcher responded that the research was necessary to ensure the college didn’t build more housing than was needed.