TO: University of Idaho Students, Faculty and Staff
FROM: Scott Green, President
DATE: Nov. 2, 2020
SUBJECT: U of I Finalizes Agreement, $6 Million Annually to be Invested in Strategic Initiatives
Everyone at the University of Idaho has worked incredibly hard over the past 16 months to improve the financial position of our institution. Each and every effort to limit spending, participate in furlough and put the university first is very much appreciated.
Simultaneously, we have looked at business practices across the institution and come to better understand the unrealized potential of our steam plant. This asset, however, is one of many across our university and across all institutions in the state, that is a victim of deferred maintenance. There are few viable ways to turn this around when state dollars for such things are limited.
Today, the State Board of Education approved our partnership with Sacyr Plenary Utility Partners Idaho LLC to lease the steam plant and utility system in a 50-year public-private partnership (P3) agreement. This partnership provides the university with money to invest in strategic initiatives, allows a world-class operator to bring efficiencies to the plant and is a responsible business strategy.
The agreement will generate $6 million per year, from the investment of the net proceeds of an up-front payment of $225 million. The funds must be used for projects that generate revenue. We will invest those funds strategically and proactively within our university and cannot use them to offset university or unit deficits. By doing this, the investments will pay programmatic and financial returns for 50 years.
In the first year, we plan to invest:
- $3 million in graduate student success and research, including increasing the number of graduate student scholarships and stipends as well as the number of post-doctoral positions;
- $1 million in telling our story to recruit new students; and
- $2 million in student success initiatives, including scholarships to help bridge the $5,000 funding gap many of our students experience.
The agreement requires the P3 dollars be invested in activities with financial return, which will, in turn, help our overall financial position.
We are not alone in using a public-private partnership to invest in our future. The University of Iowa and The Ohio State University have P3 agreements for their utility systems, among others.
This partnership is an incredible opportunity for the university to invest in itself. This investment will, over time, help each of you have the resources you need to achieve even more. Putting the university on a solid financial path is not a quick or easy journey, but it is one in which we will succeed by working together as Vandals do.
To learn more about P3 and what it means for U of I, visit the FAQ.
Scott Green
President
president@uidaho.edu
uidaho.edu/president
