IOWA CITY — The University of Iowa is getting creative on how to get more money.
In recent years, the state has cut the university’s budget.
Last year, Governor Reynolds tasked them with finding new ways to make money.
Now they have a plan and some people are not happy about it.
A public-private partnership has now approved between the University of Iowa and two French companies, ENGIE and Meridiam.
“This public-private partnership is exactly the kind of innovative thinking that we need not only at Iowa’s public universities, but across state government,” Reynolds said.
Under the agreement, the French companies are paying the university $1.2 billion up front to run it’s power plant.
ENGIE will operate the plant for 50 years, while the university pays them back with interest.
They plan to do that by investing part of the $1.2 billion they’re given up front.
“UI will continue to pay for the fuel to operate the plant, it will continue to pay for the employees to run the plant and will continue to pay for any capital expenditures that need to occur to keep the plant operating efficiently, safely and effectively,” University of Iowa President Bruce Harreld said.
Public universities have two major funding streams, tuition and state funding.
Last year, Reynolds asked the Board of Regeants to find creative ways to get money outside of those traditional methods.
If all goes as planned, this new partnership will do just that.
UI said they’ll use the extra funds to help pay for a long-term plan to improve the campus and increase enrollment.
“Our university was created at the founding of our state in order to serve the citizens and I firmly believe this new partnership will serve that original mission,” Harreld said.
West Des Moines Senator claire celsi isn’t happy about this plan.
She said the process hasn’t been transparent and said it’s a risky agreement.
“The biggest risk is that the investment will not perform and that the taxpayers of the state of Iowa will be on the hook for that money,” Celsi said.
Herrald said there is some risk involved in any agreement like this, but the models they ran show this partnership to be low-risk.
For project timeline and contract, click here.