Despite a failing economy, area universities say they are not struggling with bond debt.

With state funds for capital improvements non-existent, universities are often left to seek private donations or, more likely, revenue bonds, to grow the campus.

Missouri Western State University’s growing campus over the last 10 years has racked up $40 million in revenue bonds. Northwest Missouri State University’s multi-phase residence hall project and a couple of other renovations have tallied $85 million.

“(There have been) no surprises with the downturn in the economy,” said Mel Klinkner, Western’s vice president of financial planning and administration. “The only thing is, if we had gone down in enrollment, then it could’ve been an issue.”

Scanlon Hall, the newest dorm on campus, was built with bonds that are paid for by revenue generated through fees from students living there. A renovation of the student union and recent addition of a commons area near the residence halls also are a part of Western’s bonded indebtedness.

Other recent campus projects, such as the completion of the Fulkerson Center, were paid for through private donations. The current project, Remington Hall, a science building that will be completed in December, is being paid for through a private donation from Wes and Patsy Remington, and through the Lewis and Clark Initiative, which generated funds through the partial sale of the state’s student loan authority.

Western’s residence halls have about 1,100 beds. Fees generated by students living in those rooms pay the debt service on the bonds. Northwest’s bond indebtedness is twice that of Western’s, but it has more than twice the number of students living on campus. Those student fees also go toward bond principal and interest.

Dan Edmonds, interim vice president of finance and operations at Northwest, said enrollment is up and the residence halls are full, which keeps the revenue coming in to pay the bonds, one of which will be paid off in 2013 and the other in 2028.

“We’ve met our covenant agreements and still intend on doing so,” Mr. Edmonds said. “I can understand where a lot of institutions are having this concern in an environment of declining returns.”

More phases are expected with Northwest’s residence hall plan, but there are no current plans to seek revenue bonds to carry on with the project. “I would say that we might be hesitant to look at any additional debt at this time,” Mr. Edmonds said.

State regulations forbid using tuition or state funding toward auxiliary purposes, which would include new buildings or renovations. Mr. Klinkner said institutions typically study the situation to ensure they have revenue to pay for projects, and then proceed to secure bonds.

In looking to the future, Mr. Klinkner said the biggest issue is maintaining capacity in the residence halls. “If you have a drop of 20 percent of the occupants in the residence halls, we’d be struggling,” he said.

Both campuses are expected to report record enrollments this year. However, the Western Interstate Commission for Higher Education is forecasting that the enrollment boom may be at its peak. A recent report says Missouri will see a 5 percent drop in college enrollment by the year 2020.

Jimmy Myers can be reached

at jimmym@npgco.com.