UA lends AIC money to cover costs

Arizona Daily Wildcat Celestino Fernandez

"The only way to operate here will be with the loan," said Celestino Fernandez referring to the $950,000 loan from the University of Arizona's unrestricted fund.

The loan, which was approved Thursday by the Arizona Board of Regents, will fill the operating and personnel funding gap.

Fernandez said although AIC requested $5 million from the state, it approved a spending authority of $2.2 million, assuming the branch campus would have more money rolling over from 1996-97s appropriations and a higher enrollment.

"We found ourselves trying to serve twice as many students with half the budget," he said.

AIC had an extra $31,000 left in its budget, Fernandez said, which was much less than the $545,000 the Legislature projected.

Where the state expected tuition revenues from 290 full-time students, fall enrollment is estimated to be between 95 and 115 students, about double last spring's enrollment.

"No one ever expected that many students," said Paul Sypherd, UA interim president and provost. "The only way to fulfill the regents' mandate was to transfer funds."

The shortfall in enrollment, Fernandez said, is due in part to a January threat by the Legislature to close the campus if by October enrollment did not reach 300 students.

"They did not adopt the suggestion, but it got a lot of media attention," Fernandez said. "Some students withdrew their applications and others canceled visits they had scheduled."

Sypherd said the enrollment will decrease, but within five years will rise because a growing high school population will continue on to college.

The future of AIC, he said, is "very threatened" if the Legislature and the regents do not understand that a branch campus has up-front costs.

"The problem was no one was able to deal honestly with the start-up costs," he said. "Either this is the time to develop a second campus with a separate mission, or not to have one."

Sypherd said without the loan, AIC would have had enough money to cover costs for just the first semester.

Last week the regents made two statements dealing with the future of AIC, including approving the loan and suggesting AIC "rethink" how they will support themselves if inappropriate state funding continues.

Fernandez said the loan will be repaid, with interest, throughout the next 10 years.

He said, however, it is not uncommon for the UA to loan money to colleges and departments.

"It's the university's way to bridge a funding shortage," he said.