The board that oversees the operation of the three state-supported universities today agreed to allow the University of Iowa to borrow money for flood recovery. University officials told the Board of Regents in a telephonic meeting that flood expenses so far have reached nearly $90 million, while reimbursements from insurance and the federal government have fallen short of that.
The board voted unanimously to authorize a $30-million bond issue to cover cash-flow problems. Regent Michael Gartner questioned U-I vice-president Doug True about the plan.
"Will all of this money ultimately be reimbursed from one government entity or insurance or another?," Gartner asked, and True responded, "This is intended for our use to cash flow for what we anticipate will be reimbursed by third parties." The board learned that the university has received roughly $74-million from insurance payments, the Federal Emergency Management Agency (FEMA), and other sources to pay for flood recovery.
True says that hasn’t been enough to cover expenses incurred so far, and it sometimes takes a while for FEMA to reimburse. "We’ve been reimbursed $17-million so far by FEMA, and there’s another approximately 21 million out there that we could be receiving in the future," True explains, "we just need to make sure we have the cash flow to make this work."
True estimates that the university would borrow as much as 10 to $20-million right away. The full $30-million would be available for three to five years into the future. The university will solicit bids for the bonds, and the Regents hope to approve a bid at their next regularly-scheduled meeting in February.