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Gates at the entrance of California University of PennsylvaniaGates at the entrance of California University of Pennsylvania


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Posted on June 30, 2015

At its June 30 meeting, the Board of Governors for Pennsylvania’s State System of Higher Education approved the University’s request to acquire our six main-campus residence halls from SAI, the Student Association Inc., and to pay off the debt for those buildings through State System bonds.

Currently, SAI owns the six buildings and pays the University to manage them. SAI splits housing profits with the University, retaining 30% and giving 70% to Cal U.

I’d like to explain the University’s plan to assume ownership of the residence halls and tell you why our leadership team believes this change will benefit both the University and our Cal U students.

First, some background: The main-campus residence halls were built between 2004 and 2008. The six buildings include 726 units, with 1,497 beds. Construction was funded through a variable-rate financing model that included occupancy and debt coverage ratios that must be met.

Had the financing arrangement for the buildings been altered before June 30, 2015, SAI would have faced a substantial penalty. But a key agreement is expiring, making this the right time for the University to assume ownership of the halls.

Why acquire the residence halls?

The plan to acquire the residence halls has a number of benefits. Most importantly, it has the potential to reduce operational costs and give our University the flexibility to lower room rates. That could make campus housing more affordable for students and their families.

The University Housing Office also would gain the ability to change room configurations in order to meet student demand, perhaps by making more single rooms available.

We believe the plan makes good business sense, too. It frees the University from bond covenant restrictions regarding occupancy, converts to a low fixed-rate financing model, and eliminates more than $500,000 per year in expenses.

Although the purchase will add to the University’s overall debt, the estimated reduction in annual debt service payments is substantial — perhaps as much as $34 million in savings over 25 years, compared to the current financing model.

What’s next?

Once the acquisition is completed, the University will manage main-campus housing. This will be a seamless change, since Cal U has provided oversight and management support to the residence halls since they were constructed.

SAI will continue to own Vulcan Village and the SAI Farm, and to fund clubs and organizations for Cal U students.

Residential living can be an important part of a student’s college experience, and Cal U is committed to offering campus housing that is convenient, safe and affordable. As the University assumes ownership of its residence halls, I can assure you that we will continue to provide the same high-quality facilities and services that our students have come to expect.

Sincerely yours,

Interim President Jones' signature.

Meet Interim President Geraldine M. Jones