EWCHEC Funding Commitments Climb
Construction funding complicated by rising costs, unique structure

First Taylor ISD decided to chip in $50,000. Then the Taylor City Council decided to up its contribution to $125,000. Now, the Taylor Economic Development Corporation is augmenting its annual contribution to the East Williamson County Higher Education Center.

The TEDC’s increase from $100,000 to $125,000 is one in a string of funding promises addressing rising construction costs that threaten to make the center smaller than hoped and planned, Temple College at Taylor Foundation Board President Thomas E. Martinez said.

“Because of the economy and material costs going up, we were going to have to make some decisions as to possibly downsizing the building to accommodate the funding that we have,” Martinez said.

Martinez said the center was faced with possibly removing two classrooms. With the additional funding promises, they likely will not have to, instead trimming costs from landscaping and signage to accommodate any shortage in financing.

“We don’t want to sacrifice its size because the first building needs to be a statement building,” TEDC President and CEO Jason Ford said, indicating the partners’ commitment to the facility and educational opportunities it will provide.

The TCAT’s funding as well as appropriations from Texas State Technical College in Waco brings total annual funding for EWCHEC’s construction bonds to $550,000, a number officials hope will help attract a bank loan adequate to complete the facility’s first building at the original specifications.

It will cost about $6.5 million to start construction on EWCHEC, Martinez said. So far TCAT has received no bids for its bond proposal, which may end up delaying the center from breaking ground in fall 2009 and the spring 2010 opening date.

“We’re still within that window of opportunity, but the longer it takes the more that window closes. That’s why we’re working at a feverish pitch right now,” Martinez said.

The structure of EWCHEC’s funding is leading some banks to second guess opening their pocket books. Usually a higher education facility will be funded by one or multiple universities. The EWCHEC’s financing is unique because of the cooperation of the city, TEDC and Taylor ISD. For a multi-institutionally funded education center, it’s nearly unheard of, Martinez said.

“The problem is this is the first time that this has been done,” Martinez said. “Financial institutions have a harder time dealing with it. They have a lot of questions.”

Questions arise because the city council and the school board of trustees cannot technically commit 100 percent to annual funding over the 20 year life of the loan. A future board or council may decide to appropriate the money elsewhere.

That possibility irks prospective lenders.

“That’s in the law,” City Manager Frank Salvato said. “It’s a higher risk, I guess, but you know, that’s just something they have to come back to us with and talk to us.”

When EWCHEC opens, it will provide education from the ninth grade level to a master’s degree. Texas Tech University announced Tuesday it would create a nursing program at the center.