Fact Checker here. You knew I'd be writing about that editorial, and indeed I want to comment on several aspects.
The editorial board assures us the revenue stream from housing fees will pay for this project. Fact Checker doesn't believe that for one minute.
Let's look at existing housing, where there is no outstanding debt. Just about all the housing payments are eaten up by current services, like housekeeping, current costs like heat, air conditioning and electric, and routine maintenance like painting and buying new mattresses. We do not salt money away to cover major renovations, like the one that Few went through, and Crowell and Craven need so urgently.
The editorial tells us that rents from the K4 dorm will not only pay for the above, but they will be enough to pay the interest on the loan we will take out to build this folly. Prove it. Give me the numbers.
Specifics. Numbers. Make the case with real facts.
We'll be able to pay the interest? Ain't going to happen.
I notice too that the editorial does not use the B-word. Borrow. We are going to add to our already burgeoning debt… right now it totals $2,547,000,000. Yes that's right. That's BILLION. Another B-word.
We are going to Burden the annual Budget with more interest payments, which in the last year alone jumped 20 percent. Imagine what will happen when the economy recovers and interest rates start to rise, because much of our borrowing has been with floating rates.
Moreover, I would like to point out that we will only be paying the current interest on K4. Unlike a mortgage on your house, where you reduce the principal every year, at the end of 40 years we'll have an outdated dorm PLUS we'll owe everything that it cost back in the year 2010. The only hope of future Dukies will be to refinance, at the mercy of whatever bankers are charging at the time.
Here is just one illustration of the debt that we are giving to future Dukies. It's called the Series B 2006 bonds. We got $128,435,000 and we are paying interest rates between 4.3 percent and 5 percent until the year 2042. In the year 2042, Duke needs $128,435,000 lump sum to pay back the loan -- and guess what -- we have no idea in hell and no plan at all on where to get that money.
Finally, let me ask if this new dorm will pay for itself, how come we don't put up new dorms all over campus, including Central. What folly!!
Yes, we are told, the administration did not deal with stakeholders specifically on this dorm, we had a place at the table for planning in the past couple of years. Planning that had to be put aside because of the financial meltdown.
When all construction was put on hold because of the financial meltdown, who then decided this project was priority #1. List for me the students that participated in that discussion. The faculty. The alumni. Who made this decision? Be specific. What meeting, what date, what input? What other options were considered?
And then there is the matter the actual plans for the dorm.
The bottom line is this: Dean Nowicki appeared before the Campus Council on October 8 to enthusiastically tell students their participation was welcome. Seven weeks later, Tallman Trask let it be known that the architect was almost done.
On October 9, the Chronicle quoted Alex Reese, vice president, Campus Council: “I hope to see Campus Council and a wide variety of students involved in discussions about which living style are most amenable.”
List for me the people who participated in those discussions. List for me the ideas that they presented that were incorporated. Loyal readers, Fact Checker is not happy today.
✔DUKE GETS INTO THE HOUSING BUSINESS
If all this were not so serious, I would be amused by the thought that Duke needs this dorm to test what living arrangements should be like for undergraduates. As if Duke and other universities did not already have a clue.
✔Finally, if the Brodhead administration made us aware of its plans, if it made those plans with proper participation by stakeholders, you might even find Fact Checker supporting the boys in Allen Building.
That day has not arrived, so enjoy this one. Thanks for reading Fact Checker. ✔