CMU will consider private-public model
Colorado Mesa University trustees on Wednesday approved exploration of an idea that would make the school a public-private hybrid.
With a recent University of Denver study indicating the state’s contribution to Colorado Mesa could drop from $18.5 million this year to $6 million nine years from now, Colorado Mesa Vice President of Finance Pat Doyle told trustees the university should search for a funding solution as soon as possible.
“The other option is to try to take as small a cut as we can and fight other institutions for higher education money,” he said.
One idea, Doyle said, is to create a “charter university.” Under this plan, the university would operate as a “quasi-private, quasi-public” institution that would ask the state to issue $260 million worth of certificates of participation, which are similar to bonds. The expectation would be for the state to pay off the certificates of participation in exchange for the state not having to pay its typical annual contribution to the university.
People would buy the certificates and the university would invest the proceeds, then replace the amount the state usually contributes to the university with the $13 million in interest Doyle estimates the endowment would earn annually. The $13 million figure would be less than the state’s current contribution but more than the University of Denver study projects the state will give the university by 2015. Doyle said the university may make up the difference in part through increased enrollment, adding “we really want to keep tuition in the middle-single digits” for thousands of dollars.
Doyle said the concept has not been replicated anywhere else in recent years but would be similar to the system Cornell University uses. Like a charter elementary, middle or high school, the university would receive public money but have some private-like features, like being exempt from the state personnel system and Colorado Department of Higher Education and Colorado Commission on Higher Education oversight while maintaining tax exempt status.
Colorado Mesa President Tim Foster said a state representative who lives outside Mesa County has already expressed interest in carrying a bill that would make the charter status possible. He said Colorado School of Mines is interested in the idea and may partner with Colorado Mesa on the legislation.
“If we’re going to do it we’d rather do it this year,” Foster said, citing low interest rates that may make it easier to sell and pay off certificates of participation.
Trustees approved the idea of pursuing legislation that would give the university the ability to become a “charter” school. Trustee Chair Doug Price said the term charter may be subject to change but the idea is worth exploring while higher education money is projected to decrease due to increased demand for state funding for K-12 education, corrections and health care.
“It seems like a sensible course to me we start looking at solutions,” Price said.