NNMC Administration and Board Members requested a $16M “Systems Improvement” Revenue Bond to, at long last, begin their feverishly pursued Student Housing Construction Project.
Demonstrating a level of transparency unknown to NNMC’s Board of Regents, the New Mexico Board of Finance makes video and audio of every meeting available online. You may access the July 15th meeting in full at http://governor-nm.granicus.com/MediaPlayer.php?view_id=2&clip_id=1557 (Northern New Mexico College’s presentation is the last of the day and begins at 5:37 and continues until the meeting adjourns at 6:21. All quotes from the meeting in time brackets.)
The members of the NM Board of Finance firmly questioned NNMC President Nancy “Rusty” Barceló, Vice-President for Institutional Advancement Ricky Serna, Vice-President for Finance and Administration Domingo Sanchez, and the President of Monument Construction Timothy R. Pitcher.[i] Pitcher’s company is located in Indianapolis, Indiana, so the NNMC Study Group hopes that Mr. Pitcher had other business in Northern New Mexico—maybe golf—that can justify his unsuccessful trip to win approval of public bonds to construct dormitories for NNMC. But we’re getting ahead of ourselves…
The New Mexico Board of Finance refused to vote to pass the requested revenue bond for the student housing construction project. In the last few awkward, uncomfortable minutes of the meeting, not a single member of the Board of Finance would put forward a motion to vote on the NNMC requested bonds and construction [6:19-6:21]. Because no member of the Board would put forth a motion to approve the bonds, the ill-conceived, no-bid project was finally defeated. Or at least shelved, deferred, tabled… indefinitely.
In denying the schemes of NNMC President Barceló and her Board of Regents, the New Mexico Board of Finance scored a win for current NNMC students, who have seen their tuition increase by more than double in three years as programs, services, instruction and faculty have been cut. The New Mexico Board of Finance also scored a win for New Mexico taxpayers, who have watched as Northern New Mexico College has squandered our hard-earned money while President Barceló and her Executive Team, including Vice-President for Institutional Advancement Ricky Serna and Vice-President for Finance and Administration Domingo Sanchez have sent our college into a steady decline.
We might imagine the deep embarrassment—even humiliation—that must be felt by Barceló et. al. after years of confident and premature announcements of their new dorms on campus: “Northern New Mexico College will open its first residence hall on the Española campus in Fall 2015,” boasts the College website.[ii] Indeed, NNMC Men’s Basketball Coach and Athletic Director Ryan Cordova has been recruiting student athletes to Northern assuring full on-campus accommodations. Will those students and their families receive an apology for NNMC’s disingenuous promises?
How were the NNMC Administrators and NNMC Board of Regents able to so confidently—if ineffectually—argue their case to the New Mexico Board of Finance?
At the May 22, 2014 NNMC Board of Regents Meeting, NNMC Board Members Michael Branch (owner, Branch Realty, Santa Fe), Kevin Powers (retired, investment banking, Albuquerque), Alfred Herrera (retired, New Mexico Public Education Department, Española) and Rosario “Chayo” Garcia (agent, New York Life Insurance Company, Española) voted unanimously to allow Paul Cassidy of RBC Capital Markets and Peter L. Franklin of Santa Fe’s Modrall, Sperling, Roehl, Harris & Sisk, P.A. Law Firm—to act as agents of NNMC—pursuing funding for the multimillion dollar, no-bid dorm project.[iii] The NNMC Board of Regents approved this though Franklin explained that this funding strategy "describes the security for the bonds” as “basically the College's system’s revenues, basically all the revenue that the college earns or takes in.” [iv]
When Board Secretary Herrera, asked if this meant Northern was pledging the dorms themselves and the dorm revenue as security (aka collateral) Peter Franklin clarified that the guarantee of the debt was not a guarantee using the project itself, but instead the NNMC Board of Regents was seeking to pledge
[E]ssentially all the College’s assets. All the College’s revenues and assets.
This is not a project revenue financing where all you’re pledging is the
revenue generated by the student housing. Um… would be nice if it could
be that, but… I… the problem is it won’t… Well, I shouldn’t get into that…”
When pressed further by Regent Branch on guaranteeing the debt incurred by building the dorms, attorney Franklin responded, “All I guarantee is that… I got out of bed this morning and here I am.”
Paul Cassidy explained that the tax-exempt bonds would be “a fixed-rate debt that can’t be refinanced for ten years.” Thus, the terms the current NNMC Board Members vote for would be set in stone for at least a decade. No matter, let’s not worry about the details! Cassidy continued assuring the Board Members, “I think the keys, though, to the project are getting State Board of Finance approval. Once you have State Board of Finance Approval and NMFA Board approval on the loan, your consultants on the construction side can get started.”
But when the New Mexico Board of Finance met this week they not only did not approve the project, they strongly questioned the proposal. Issues included:
- Dropping student enrollment [5:43, 5:55];
- NNMC’s proposed student housing project receiving Moody’s lowest investment grade rating [5:47];
- A needs survey that was poorly designed and “unrealistic” [6:01];
- No forward-thinking budget to operate the student housing [6:03-6:05]; and,
- Intentionally leaving summer revenues out of the proposal [6:11].
Further, the New Mexico Board of Finance was clearly disturbed by the $978,000 in fees charged by Monument Construction for “student housing study,” “student housing survey,” “financial analysis,” and “market analysis” [6:06-6:08]. Yes, close to one-million dollars in fees to—as a member of the New Mexico Board of Finance put it—“[do] the study to show need for housing… and you’ll build it?” [6:09]. Yes, NNMC’s Administration agreed to pay just under one-million dollars of our taxes to Monument Construction, which studied the need for the student housing they would be building.
Followers of NNMC may recall that this April, President Barceló’s Administration insisted on cutting three programs , 7-10 full-time staff and instructors (tenured professors among them), and eliminating our Child Development Center to make up a $250,000 shortfall in their budget. The cuts to student instruction, faculty, staff and child care equal approximately one-quarter of the fees paid to Monument to study the needs for its own services. President Barceló released a paid advertisement that read in part “Considering the closure of any program is a difficult and unfortunate task, but one that is sometimes necessary in order to preserve our College.” [v] Meanwhile, her administration paid approximately four times that amount to Monument Construction.
New Mexico Governor Martinez ended the New Mexico Board of Finance meeting with a compassionate understatement, “We need more time in viewing the stability of the institution” [6:03]. Another Board of Finance Member said simply, as if to a child, “Thank you for coming to talk to us. Good luck.”
So what will NNMC’s Administration and Board of Regents do next? Will they abandon the ill-advised, no-bid student housing plan? Will they concoct another multimillion dollar scheme? (Board member Branch has often shared his deep longing for more capital projects and a memorial at El Rito.) Will they be chastened by their own embarrassing display at the New Mexico Board of Finance? Will President Barceló think less of her “legacy “of bronze plaques on stucco and at long last concentrate on serving the instructional needs of our students? Will the Board be reminded of the main mission of our public educational institution?
When the NNMC Board met today (Thursday, July 17th) the Residence Hall update was less than one-minute long, and made no mention of the concerns of the New Mexico Board of Finance and the Board of Finance’s refusal to vote on passage of a $16M “Systems Improvement” Revenue Bond and the Student Housing Construction Project for NNMC. Vice-President of Finance Sanchez said instead--"It is still a work in progress.”
[i] See Monument’s website at: http://www.monumentllc.net/about.html
[ii] Publicity and postcards distributed by NNMC Communications and Marketing: http://nnmc.edu/gallery/student-housing-northern
[iii] More information at: https://www.rbccm.com/municipalfinance/cid-259461.html and http://www.modrall.com/plf
[iv] All direct quotes that follow are from the May 22, 2014 Northern New Mexico College Board of Regents meeting (full audio and video recording available from the NNMC Study Group upon request).
[v] President Barceló’s full statement available at: http://22.214.171.124/wordpress/?p=13076