March 9, 1995
The site has been chosen and architects have completed the plans.
All the participants -- from the CSU Board of Trustees to President Robert A. Corrigan and SF State students -- have given the project the go ahead.
But before construction of a new $3.4 million child care facility at SF State can begin as scheduled this August, Associated Students Inc., must iron out one final detail: finding a way to pay for it.
Students have voted to foot the bill, raising their student fees to pay for a child care center three times -- in 1989, 1991, and again in a 1992 referendum that more than doubled fees paid to AS.
Although those fee increases flooded AS coffers -- this year, AS will take in a half million dollars more than it spends -- paying for a project this size with cash up front is beyond the means of AS.
Plans to finance the project with municipal bonds were put on hold two months ago, said Sarah Johnson, director of the existing AS children's center.
And because AS wants to build the children's center on land it doesn't own, banks won't lending money for the project, said Suzanne Michalik, Director of Auxiliary Accounting at SF State.
If the funding problem can't be resolved by the end of next month, construction could be delayed for a year, Johnson said. Besides disappointment for the 271 families on the waiting list for day care spaces, delays would mean higher expenses for the project.
"The longer we wait," said Johnson, "the more it's going to cost to put up the building."
The bond issue stalled after lawyers for Denver-based bond underwriters George K. Baum and Co. raised questions concerning the use of AS revenues -- student fees -- as security, said Johnson. The student body might, for instance, vote to eliminate all funding to AS, leaving bond holders in the lurch.
AS lawyers believed that a bond issue would create a legal obligation on the part of students to repay the debt, but the doubt cast on the issue by Baum and Co. lawyers meant not getting an investment grade bond rating, said Johnson. Without the favorable bond rating, AS would have to pay higher interest rates than it could afford.
In addition to the possibility that students could vote to stop funding AS, there is the possibility that AS could withdraw funding to the children's center, including the dollars it collects from the fee increases students voted for in 1991 and 1992 on the understanding that those dollars were to be set aside for the children's center (see related story "AS not bound...").
Johnson said she is considering establishing closer ties to the university to fund the building project.
"I've been saying let's look at alternative funding, let's ask the (SFSU) Foundation for money again. We approached them a few years ago and they weren't interested, but that was before Corrigan was on board. Corrigan is committed to child care," she said.
Johnson said that in return, the university could be promised some day care "slots" for staff and faculty members, which she said will be an increasingly important employee benefit needed to attract younger workers as aging faculty members are replaced.
In 1990, the president's office mailed 3,500 child care surveys to faculty and staff members. Of the 764 returning surveys, 146 had children between six months and five years old. Another 400 said they either had a child on the way or were planning to add a child within five years. Altogether, 72 people would have "probably or definitely" used on-campus child care services if offered, the survey found.
"I know AS doesn't want to give up slots, but if the university helps with funding I think that's a fair trade off. Right now we don't know how we're going to build the building, and we stand to lose what money we have invested in the design phase," Johnson said. Michalik put the cost of the design phase at $500,000, primarily for architect's fees.
If the project is canceled, AS will have to decide what to do with more than $1 million in investments it has accumulated in anticipation of the debt load from the bond issue.
California State University policy on campus children's centers states that the Board of Trustees intend "that no qualified student parent be denied access to any CSU campus... because of the lack of adequate and affordable campus child care services." But Johnson said that AS operates child care at SF State partly because CSU wants no part of the liability risks that come with running day care programs. Judy Osmon, Assistant Director of Access and Retention for CSU Academic Affairs, said that all CSU campuses -- with the exception of San Marcos -- have child care centers, and that most have at least an informal relationship with AS at their respective campuses.