UMaine System Conducts COVID-19 Assessment of $51 Million in Bond-Related Capital Projects

Projects with approximately $65 million in construction costs will be underway at Maine’s universities this construction season

S&P Global Affirms AA- Rating UMS Revenue Bonds

Orono, Maine — The University of Maine System Board of Trustees Finance, Facilities, and Technology Committee received an update on a COVID-19 assessment of $51 million in bond-related investment projects at the universities tied to the November 2018 voter approval of the University Workforce Bond.  Trustees learned how COVID-19 was having an impact on permitting and access to materials and resulting in accommodations around worksite safety and virtual bid development.  

See pages 10-12 of the FFT materials for the University Workforce Bond project list totalling $51 million in projects at various stages in the development process. 

USM Portland Residence Hall Project Moving Forward with COVID-19-Related Delay:  

The largest single project funded from proceeds of the 2018 University Workforce Bond is the University of Southern Maine’s plan to construct a Career and Student Success Center and Residence Hall on its Portland campus.  

President Glenn Cummings and officials at USM updated the FFT Committee members on how design and permitting for the project have been delayed by COVID-19.  USM is moving the planned completion date for the priority project from Fall 2022 to May 2023 and will conduct an updated market demand analysis for the project in the Fall of 2020.  See Tab 1.

“Campus leaders are conducting critical assessments of the impact of COVID-19 on current project management, potential fiscal challenges, and the long-term demand for facilities,” said Mark Gardner, Chair of the UMS Finance, Facilities and Technology Committee.  “More than $50 million in bond-related investments are moving forward in support of the University System’s education and research missions with careful review and adjustments when needed.”

Summer 2020 Construction:  Projects with $65 Million in Construction Costs Underway

Projects with approximately $65 million in construction costs will be underway at Maine’s universities this construction season, providing critical investment and employment opportunities on the campuses of Maine’s public universities.  Earlier this week the University of Maine held a virtual ground breaking on the $78 million Ferland Engineering Education and Design Center with construction to begin in May and the University of Maine at Presque Isle is now taking bids for work on its nursing lab this summer.  

S&P Global Affirms AA-Rating and Stable Outlook for UMS Revenue Bond

On April 24 S&P Global affirmed its AA-Rating and stable outlook for UMS revenue bonds.  The finding came following the agency’s review of University of Maine System FY 19 financial results, student and workforce actions related to COVID-19, and the fall 2020 enrollment outlook.  

The S&P rating recognized that UMS has taken prudent measures to address the pandemic and reflects the strength of the System’s financial resources and low debt for the rating category relative to medians and peer institutions.  S&P notes, however, that future enrollment or state appropriation declines would place additional financial strain on the System that is not accounted for in its report. 

A strong rating and outlook reduces interest rates on UMS-issued bonds and the overall cost of financing university projects.  The rating affirmation for the University of Maine System comes despite the current COVID-19 uncertainty and the ongoing demographic and fiscal challenges in public higher education.

“The Trustees and I are committed to responsible stewardship of our public resources and maintaining the fiscal stability needed to fulfill our mission to Maine students,” said Chancellor Dannel Malloy.  “Our strong rating and outlook in uncertain times is a testament to the leadership and service of our finance professionals working under the skillful direction of Vice Chancellor for Finance and Administration Ryan Low.”