BENTONVILLE -- The Arkansas Higher Education Coordinating Board on Friday approved a bond issue for National Park College to construct residential housing and a loan issue for Arkansas State University for energy improvement projects.
"The need is there" for more housing at the Hot Springs college, said John Hogan, president of National Park College. The school has capacity to house about 240 students, but there's currently a waiting list of 80 students -- which has reached triple digits in recent years.
Housing is "constrained" in Garland County, which has led to fewer short-term rentals, which -- in turn -- means fewer places to stay for students, Hogan said. Only a quarter of the college's students are online-only, with the rest taking at least some classes on campus, although total credit hours taken by students is currently flat.
National Park College plans to issue bonds not to exceed $6.675 million with a term of 30 years and an interest rate no higher than 6.7%, according to Nick Fuller, assistant director of finance for the Arkansas Division of Higher Education. Proceeds will be used to construct a new 160-180 bed residential housing facility, and the college's board of trustees unanimously approved this financing in May.
Though this is a significant investment, trustees support students and "see the need for housing," Hogan said. This new building should be ready by the fall of 2025.
The 6.7% interest rate listed in the proposal "would be a worst-case scenario," as the college anticipates a rate more like 4.5%, said Kelli Embry, National Park's vice president for administration. Rent for students at the new hall will be well below the median rent in Garland County, which exceeds $1,000.
Debt service on the bond issue will be supported by millage revenue, and "Coordinating Board policy regarding debt service for projects financed by local tax or millage provides that annual net millage revenue should be no less than 120% of the total annual debt service," according to Fuller. Data "demonstrates that National Park College has sufficient millage revenue to support" this bond issue.
The current millage rate is 0.8 mills, and that rate generated roughly $1.5 million in annual revenue five years ago for National Park, Hogan said. However, that rate now generates about $1.9 million annually, and -- of course -- students paying for this housing will also generate revenue to help pay for the building.
Arkansas State, in Jonesboro, plans to secure a 10-year loan of $2.9 million at zero interest, a financing plan approved by the Arkansas State University System board of trustees in June, according to Fuller. Proceeds will provide needed campus-wide energy improvements that include re-roofing and updating air handling systems of multiple existing buildings.
The loan is being sought from the Arkansas Sustainable Building Design Revolving Loan Fund, which is managed by the Arkansas Building Authority, according to Fuller. Data demonstrates that Arkansas State "has sufficient tuition and fee revenue to secure" this loan.
The coordinating board met at Northwest Arkansas Community College in Bentonville.