Gov. John Carney has signed a bill that should give Delaware Technical Community College a funding source for its aging campus buildings.
After taxpayer blowback and lagging legislative support, Delaware Tech dropped its proposal. In its place, substitute legislation was drafted.
Instead, the bill creates a fund that gives the college’s board the authority to issue bonds to finance the cost of major and minor capital improvements, deferred maintenance, and the acquisition of related equipment and educational technology. The bill also allows the establishment of a Community College Infrastructure Fund to pay the principal and interest on bonds.
Any bonds would require approval by the General Assembly.
The mechanism would indirectly affect other public construction projects in the state, since money will be diverted into the fund that might go to other projects.
The bill summary stated that it is “the intent of the General Assembly to appropriate at least $10 million for deferred maintenance for the next 5 years to be deposited to the fund together with such other funds as may be deposited by the college from sources including, but not limited to, tuition and fees, private funds, non-state grants and federal support.”
The act also provides a voluntary mechanism for the state to provide matching funds for minor capital improvement projects.
Delaware Tech, which has four campuses around the state, has a backlog of deferred maintenance projects for aging campus buildings.
The college, unlike public and high school vo-tech school districts, has no dedicated fund, like the property tax that can be used for heavy maintenance, such as the replacement of heating or other systems.
College campuses around the country face similar challenges with buildings that are aging or have become obsolete. Buildings dating from the 70s, a period of high inflation, sometimes suffer from construction issues that came as builders and government coped with soaring costs.
The legislation may not satisfy some critics of Delaware Tech who in opposing the property tax levy stated that the institution should finance its operations through tuition and fees.
The indirect use of longer-term debt to finance improvements that may require regular replacements or upgrades may also be questioned. Bonds are typically used for buildings and other capital projects with longer shelf lives.
The state is also constrained by itspolicy of maintaining a Triple Abond rating. Keeping the rating, which lowers interest costs, means the amount of debt is subject to limits.