| OCR Text |
Show W <1 [-4 PRESIDENT TO EXPLORE ARRANGEMENTS FOR LOAN FOR MEN'S DORMITORY proposed loan by the Government to construct a men's 'dormitory building under the above reference project, two ques- tions have been raised regarding the security for such loan: 1, It will be appreciated if you will request Dean Leary‘s advice as to whether or not it would be legally possible to pledge, as additional security for the loan, any of the state land grant income funds. It is our understanding that this has been done in connection with previous bond issues of the University and that Dean Leary rendered an opinion as to this matter in connection with one of them. 2, If such land grant income can be legally pledged as additional security for the University's revenue obligations, it would be appreciated if you will advise us as to whether or not the Board of Regents would be willing to make a partial or limited pledge of this income, It is recognized that the Board of Regents may not be willing to pledge all of such income but possible the Board might be willing to pledge so much of this income on an annual basis as necessary to assure a total net income production affording a reasonable coverage of debt service requirements. As you know, the consideration of this loan is still in its very preliminary stages, However, from our recent investigation it appears that revenues from the building alone may not be adequate to amortize the loan over a forty year period. Moreover, from our discussion, it appears that the state land grant income is about the only source that might be used as additional security for the loan, Your advice on this matter will be greatly appreciated. Very truly yours 5/ Frank W. Heckler Division Counsel A discussion followed after which Regent Browning moved that the Board authorize the President to explore the request with the thought that a more reasonable arrangement might be negotiated. Regent Ballif seconded the motion which carried. As requested at the April meeting of the Board, a budget for 1951-52 had been prepared and sent to each Regent for study . |
