Augusta officials are scrambling to add $8 million in funding to help Georgia Regents University save more than $40 million in funding for a new cancer center. But a top state finance director said the money is already available and no matching funds are needed.
Augusta Commission members said they were told that the community needed to put up $8 million in special purpose local option sales tax money in order to get other funding to commit to the new cancer center, which will house new cancer research space.
“If we can get $8 million they will get another $4 million and the state will give $48 million,” Mayor Pro Tem Corey Johnson said.
“They want a local commitment in the game,” Commissioner Mary Davis said. “I think the total is $12 million.”
She said she was told by Michael Shaffer, the vice president of government and community affairs and chief advocacy officer for GRU, that if not, the money would go to “another institution, another medical university.”
Several commissioners heard roughly the same thing but did not have specifics.
However, Susan Barcus, the senior vice president for advancement and community relations and chief development officer for GRU, said “this really isn’t coming from us. Actually, our friends at the city are the ones that were really excited about what was going on in cancer and it moved from them, not from us.”
She said if the university can get “$12.5 million by June 30, 2014, in the bank for GSFIC (Georgia State Financing and Investment Commission), what would happen is then we get a $45 million match from the state, which is a great leveraging tool.”
But “that’s not correct,” said Lee McElhannon, the director of bond finance for GSFIC. The $45 million was part of a bond sale last June that closed in July and now awaits university action, he said.
“It is currently available,” McElhannon said. “Basically, the project can be initiated, the $45 million is available, they just have to follow the (commission rules for capital projects). But they can get going on that.”
While tax-exempt bonds usually have to be spent within five years or there are problems, these bonds were sold as taxable so there is no time limit on using the money and they offer greater flexibility to university officials in their use in combining with other types of funding, he said.
The $12.5 million is listed as philanthropy to fill out the rest of the $62.5 million project, which would rely on $50 million in bond funding, $5 million of which will be issued next fiscal year, according to an August University System of Georgia Board of Regents agenda item reducing the price of the project from $99.45 million. Construction costs are listed as $44.5 million. While it is necessary to have the money in the bank to sign contracts, it is not unusual to start work on a project and continue fundraising, McElhannon said.
GRU spokeswoman Christen Carter said in an e-mail that the funding would not disappear if the $12.5 million is not raised by June 30, adding, “I think there may have been confusion over that point.”
If the university did not raise any of the $12.5 million, “I guess they probably have to do some redesign, some rethinking of the project and maybe adjust it in some way,” McElhannon said.
The $12.5 million is just part of $100 million the university wants to raise for the new cancer center “in order to do the clinical trials we need to do, to grow with the people and the research, the clinical care and the facility needs,” Barcus said. And the support from the city “is key,” she said. “It shows that Augusta is very supportive of one of its assets, the GRU Cancer Center. The money from the city would mix in and really make a huge difference.”